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Got staff? You need to know the new rules

If you employ people you need to take the time to understand a number of employment law changes. The law has changed on zero-hour contracts, shift cancellations, parental leave, record keeping and minimum wages. 

Check out our examples and useful tools to get up to speed.

Zero-hours contracts

The Government has recently banned what’s commonly known as zero-hour contracts. All employment agreements must now clearly set out any hours you and your employee have agreed upon. Use the hours of work clause in our new Employment Agreement Builder (external link)

What your employment agreements need

For workers with set hours: The number of days, start and finish times, or days of the week, you have both agreed to.

For workers who want flexible times: You don’t have to agree to set hours or days of work. You must, however, state any that you do agree to in the employment agreement.

Any worker you want to be on call must have at least some guaranteed hours of work.

Any worker you want to be on call must have at least some guaranteed hours of work.

casestudy ChoosingAReliableOverseasSupplier

Case study

Tom employs two drivers, Sam and Suzi, at his milk distribution business. Up until now, they’ve been on zero-hour contracts and have worked when Tom’s clients needed supplies.

Tom knows he now needs to tidy up their employment agreements. He figures, at a minimum, he’ll need each of them to work 10 hours a week.

Sam says he’s flexible with when he has to work. His employment agreement is updated to say Sam is guaranteed 10 hours’ work a week, but when these happen will remain flexible. Suzi, however, wants to finish work by 2pm so she can pick up her children from day care. Her employment agreement states she’ll work 10 hours a week from 10am to noon, Monday to Friday.

Shift cancellation

Any worker whose shift gets cancelled without reasonable notice is now entitled to reasonable compensation. Also, if you cancel work at the start of a shift, or cut it short, workers must be paid in full (including holiday accrual). No employee can agree to anything less than this.

If shifts might be cancelled or cut short, you must state this in your employment agreements, along with details of the notice you’ll give and the compensation on offer if that notice isn’t given.

If shifts might be cancelled or cut short, you must state this in your employment agreements, along with details of the notice you’ll give and the compensation on offer if that notice isn’t given.

Use the shift cancellation clause (external link) in our new Employment Agreement Builder. You have one year to update existing agreements.

The new rules do not go so far as to say what is reasonable notice or compensation for a cancelled shift. You need to work this out for yourself by thinking about:

  • the nature of your industry
  • their working arrangements, eg how many guaranteed hours they have
  • how much your worker would have earned for the cancelled shift
  • if it costs your worker to prepare for a shift.

It’s also a good idea to talk to others in your industry and get staff input.

This law change is straightforward — all you need to know is that there are new minimum wage rates:

  • Adult — $15.25 an hour
  • Starting-out — $12.20 an hour (up from $11.80)
  • Training — $12.20 an hour (up from $11.80)

You can always agree to any wage above the minimum rate. Whatever this rate is, though, needs to be put in writing. Use the payment of wages clause in our new Employment Agreement Builder (external link)

To get an idea of how much wage increases will cost you —

To get an idea of how much wage increases will cost you —

or work out the estimated cost of hiring a new employee — use our Employee Cost Calculator (external link)

Parental leave payments have gone up from 16 to 18 weeks, and more people are now eligible, including:

  • casual and seasonal workers
  • those with more than one employer
  • those who have recently changed jobs
  • those who take on the permanent care of children aged under six, eg home-for-life and whāngai arrangements.

Other things to know include:

  • parents of premature babies will receive parental leave payments for longer
  • staff who’ve worked for you between six and 12 months will get six months’ parental leave — the 18-week paid period plus eight weeks of unpaid leave.

Employers must keep accurate records for each of their employees and produce them when requested by either an employee or a labour inspector — this has not changed. New employment legislation reinforces employer obligations to keep accurate employment records.

The law now spells out that these records must be kept for all employees and must include:

  • the number of hours worked by employees each day in a pay period
  • their pay for those hours.

Accurate records are also a good foundation for an employment relationship. You and your staff can be confident they’re getting the correct entitlements. And if there’s a dispute, accurate and up-to-date records will help resolve the issue.

Clearer record-keeping requirements (external link) — Employment New Zealand

Personnel files and record-keeping — business.govt.nz

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