Below provides a brief update of legislation changes coming through this year…
Hello Monday can walk through what these changes mean to your organisation and how to implement them.
From 27 February 2023, the median wage of $29.66 per hour will be adopted by Immigration NZ. This is an increase from the current median wage of $27.76 per hour.
This increase will impact the wage criteria of migrant workers applying for visa after 27 February 2023.
The minimum wage rate has again increased for 2023. This change will take effect from 1 April. Minimum wage will increase by $1.50 from $21.20 to $22.70.
Holiday and Leave Changes Proposed
The Taskforce established by the New Zealand government in 2018 proposed several changes to the Holiday Act. The proposed changes will provide greater certainty to employees and employers, as well as provide a fairer and more transparent system for leave entitlements. The changes are expected to go into effect in the first quarter of 2023, and all employers must prepare for the new legislation.
How will Annual leave be calculated?
The calculation of annual leave payments is one of the most significant changes. The payments are currently made at the greater of the Ordinary Weekly Pay (OWP) or the average weekly earnings over the previous 12 months. The new legislation proposes that payments be made at the greater of the last 13 weeks’ average weekly earnings or the last 52 weeks’ average weekly earnings.
Another significant change is how advanced annual leave is calculated. Employees currently have only four weeks of annual leave after 12 months of continuous employment. Employees will be able to take annual leave on a pro-rata basis during their first year of employment under the new legislation.
Changes for fixed-term contractors
The new legislation also limits the use of Pay-as-you-go (PAYG) for employees on fixed-term contracts with less than a year of service.
Employees who return from parental leave will be paid at their full rate for all annual holidays, as the parental leave override will be eliminated.
Public holiday and sick leave payments
The changes will also affect family violence, bereavement, alternative days, public holidays, and sick leave payments. The payments will be based on the greater of the last 13 weeks’ average weekly earnings or the last 52 weeks’ average weekly earnings. The availability of family violence, bereavement, and sick leave will shift from after six months of continuous employment to the first day of employment.
In addition, the new legislation clarifies the definition of “otherwise working day” for employees who work variable hours. It will be considered a “otherwise working day” if an employee has worked 50% or more of the corresponding days in either of the previous 13 weeks. For casual employees, the definition of “regular pattern of work” will be reviewed every 13 weeks to ensure that the employee is still engaged in genuine casual work.
Finally, the new legislation will require employers to provide payslips that include leave entitlements, which is currently not a legal requirement.
We’re here to make HR easy, and we’re always on hand to help you interpret NZ employment legislation changes.
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