90 days trial period

There is hardly a employed Kiwi who is unaware of “90 days trial period”. This amendment to employment relation act made big news when hundreds of workers took to the streets to protest against it. 

Important Milestones

This amendment is available here, below is quick summary and its effect on both employee and employer.

1. Any employer may enter into an employment agreement that contains a trial period. The restriction that limited trial periods to employers of less than 20 employees has been repealed.
2. A trial period is not automatic for new jobs in small businesses. It only occurs if the employer and employee agree to it.
3. The trial period will need to be in the employment agreement.
4. The 90 days is a maximum and it can, by agreement be less.
5. All employment rights such as good faith, non-discrimination, non-harassment, holidays and leaves are maintained during a trial period. If employer dismisses an employee for non performance, misconduct, redundancy or another legitimate reason during the trial period then employee will not be able to take a personal grievance. If employer dismisses someone because they are pregnant (for example), employee can have a grievance brought against employer.
6. There can be only one trial period per employee. An employer can not have a trial period for an employee who has worked for them previously.
7. The law only implies to new employees, and cannot affect any existing employee in their current job.

            Why employers / employees love it ?

Why employees hate it ?

Minimum Wages Act

Minimum wage act is the body of law which prohibits employers from hiring employees or workers for less than a given hourly, daily or monthly minimum wage.

New Zealand  was the first country to implement a national minimum wage, enacted by its government through the Industrial Conciliation and Arbitration Act 1894.

There are three minimum wage rates:

1) Adult

2) Youth (New entrants)

3) Training

From 1 April 2010, the minimum wage for employees aged 16 years and over is $12.75 an hour before tax.  

Below graph shows changes in minimum wage for Adult and Youth over last 13 years.

Holidays Act 1981-2003-2007

Lets talk of different types of holidays/leave. This blog only covers overview of holidays/leave, please refer to Holidays Act 1981-2003-2007 for complete details.

Quick Overview

	Commencement period after employment	Encashment	Days/year	Carry forward
Annual	12 months	Yes, depends on employer	20 (4 weeks)	Yes
Sick	6 months	No	10	Yes, but you can’t accumulate more than 20
Public Holiday	Immediate	No	11	N/A
Bereavement	6 months	No	3	No

Annual Leaves

All employees are entitled to four weeks paid annual holidays. An individual employee becomes entitled to four weeks paid annual holidays on the anniversary of the date they started their current job.

Public Holiday

All employees are entitled to a paid day off on a public holiday. For employment purposes, there are 11 public (also known as statutory) holidays provided under the Holidays Act 2003. The Act lists the holidays, but does not generally set dates for them.

Sick Leave

There is a minimum provision of five days paid sick leave after the first six months of continuous employment. An additional five days' paid sick leave is gained from that point on, after each subsequent 12 month period

The maximum accumulation of leave under the Act is 20 days .Accumulated sick leave cannot normally be exchanged for cash, nor form part of any final payment to the employee on resignation or termination, unless the employment agreement requires this.

Bereavement Leave

There is a minimum entitlement to bereavement leave after the first six months of continuous employment. On the death of an immediate family member, the Holidays Act 2003 provides a minimum entitlement of three days’ paid bereavement leave.

MYOB Payroll

If you are from an Asian country then you will really like NZ tax system, it is very easy and straightforward. There are clearly defined tax slabs and lesser tax saving schemes makes it easier to calculate and understand pay. This post is going to talk about very popular payroll software called MYOB.

MYOB Mind Your Own Business, is an Australian multinational corporation. The company provides accounting, payroll and retail software and web hosting to small and medium businesses, and is particularly well-known in Australia and New Zealand.

MYOB Payroll

It is easy-to-use; it’s suitable for any size business set up. Over 700,000 different businesses all over Australasia taking benefits of MYOB. MYOB has an awesome product on the market that is aimed at those who need to organise their business’ payroll, with little to no experience.

Tracking all of your employees’ holiday leave, sick leave and maintaining your employee records can take a Lot of time, money and resources. MYOB Payroll is an all-in-one tool that will calculate accurate earnings, taxes and deductions for you – automatically

Example

In order to understand MYOB and NZ payroll, I downloaded study version of MYOB and created a database for a dummy company called NR consultancy. Below example shows Sept-2010 pay-slip for a HR advisor named James Cook.

Assumptions:-

           -      James Cook is an employee of NR Consultancy, working as HR Advisor

           -      Pay frequency is monthly, example pay slip is generated for Sept 2010

           -      James has a gross annual salary of $42188, i.e. $162.26 a day

           -      During Sept 2010, James was in office for 12 days and below is the distribution of his  non-working days

        a) 6 Annual leaves

        b) 3 alternate holidays

        c) 1 sick leave

Limitations:-

           -      "YEAR TO DATE" is not calculated in this pay-slip, as I have only created pay-slip of only Sept 2010. I will update below screen-shot after completing my database entries for Mr James Cook.

Inland Revenue Department

The Inland Revenue Department or simply Inland Revenue (The Department of Tax) is the New Zealand government department responsible for

- collection of taxes

- payment of family assistance tax credits

- payment of Paid Parental Leave

- collection and payment of child support

- collection of student loan

- KiwiSaver

The Inland Revenue Department is part of the portfolio of the Minister of Revenue.

Timeline of Inland Revenue

It is almost impossible to cover everything about IRD on this blog, lets start with the changes to personal income tax rate.


 

Income Band	Tax rate till 30 Sept 2010	Tax rate from 1 Oct 2010
$0 - $14,000	12.5%	10.5%
$14,001 - $48,000	21%	17.5%
$48,001 - $70,000	33%	30%
$70,000 and over	38%	33%

Kiwisaver

It is very necessary to have savings after retirement for financial independence, to enjoy standards of living in retirement similar to those in pre-retirement. Kiwisaver is an answer to this in New Zealand  similar to  provident fund, gratuity, which are available in India.

KiwiSaver scheme is a New Zealand voluntary long-term savings scheme which came into operation from Monday, 2 July 2007. The main purpose of the KiwiSaver fund is for retirement savings.

A policy initiative of the Fifth Labour Government of New Zealand, it is aimed at improving New Zealand low average rate of saving. It is governed by various Acts of Parliament including the KiwiSaver Act 2006, passed in September 2006.

General guidelines:-  

• Employee participants can choose to contribute 2%, 4% or 8% of their gross pay.
• All New Zealanders aged 18–65 starting a new job, withsome exceptions, are automatically enrolled in KiwiSaver.
• Employee  can choose to opt out from day 14 to day 56 of their employment.
• From 1 April 2008 employers have to make matching contributions starting at a minimum of 1% of the employee's gross salary.

Funds withdrawal before retirement
 
As Kiwisaver fund is for retirement savings, money is normally withdrawal when you are eligible for government superannuation, currently 65, or after five years, whichever is longer. You may need to withdrawal money before your retirement, provision for this has been made in Schedule 1 of KiwiSaver Act 2006 for. 
I have made a small diagram to explain the conditions for funds withdrawal before retirement. Please refer to Kiwisaver act for complete terms and conditions.

               

Health & Safety

Employees are assets for any business. So it is very important to give special attention to the health & safety of employees. A focus on the health and safety of people in your workplace can avoid the human and business costs of workplace injuries, and improve productivity.

In New Zealand there is special importance is given to the health and safety at workplace, you see it by visiting any workplace. Over here we will talk about occupational health and safety. Occupational health and safety is concerned with protecting the safety, health & welfare of people engaged in work or employment. The goal of all occupational health and safety programs is to foster a safe work environment.

Health and Safety in Employment Act 1992

Object of Act

The object of this Act is to promote the prevention of harm to all persons at work and other persons in, a place of work by   

• Promoting excellence in health and safety management 
• Defining hazards and harm in a comprehensive way 
• Imposing various duties on persons who are responsible for work and those who do the work 
• Setting requirements that-

                (i) relate to taking all practicable steps to ensure health & safety 
                (ii) Are flexible to cover different circumstances 

• Recognizing that volunteers doing work activities for other persons should have their health and safety protected 
• Recognizing that successful management of health and safety issues is best achieved through good faith co-operation in the place of work and, in particular, through the input of the persons doing the work
• Providing a range of enforcement methods, including various notices and prosecution

Employers to ensure safety of employee 

Every employer shall take all practicable steps to ensure the safety of employees while at work; and in particular shall take all practicable steps to— 

• Provide and maintain for employees a safe working environment 
• Provide and maintain for employees while they are at work facilities for their   safety and health
• Ensure that plant used by any employee at work is so arranged, designed, made, and maintained that it is safe for the employee to use
• Ensure that while at work employees are not exposed to hazards arising out of the arrangement, disposal, manipulation, organization, processing, storage, transport, working, or use things                                             

                   (i) In their place of work; or

                   (ii) Near their place of work and under the employer's control

• Develop procedures for dealing with emergencies that may arise while employees are at work.

 General duty to involve employees in health and safety matters

• There should be ongoing processes for improvement of health and safety in the employees' places of work.
• Employer must take into account any approved code of practice for employee participation in workplace health and safety.
• If a health and safety committee or a health and safety representative makes a recommendation regarding health and safety in a place of work, the employer must either adopt the proposal or provide a written statement to the health and safety committee or health and safety representative setting out the reasons for not adopting the proposal.

Organizational Behaviour

I studied organizational behaviour (OB) as a main subject while doing my post graduation & learned organizational behaviour can play a major role in organizational development, enhancing organizational performance, as well as individual and group performance & satisfaction.

  

In simple language we can say that organizational behaviour is a systematic study of the actions and attitudes that people exhibit within organizations.

 

Role of Organizational Behaviour

• OB offers several ideas to management as to how human factor should be properly emphasized to achieve organizational objectives. 
• Understanding human behavior - OB provides ideas for understanding human behaviour in all the directions in which human beings interact.
• Individual level - OB integrates social, psychological and cultural factors to provide simplicity in understanding human behaviour. 
• Interpersonal Level - OB provides means for understanding personal relationships in the organization which focuses on the influence of one’s peer and its effect in working relationship or examines the superior-subordinate relationship.

Models of Organizational Behaviour

 MOd

Recruitment and selection

Recruitment and selection decisions plays very important role in every organization growth and development. It also significantly affects the Organization’s ability to meet its business planning needs and strategic objectives. It is important to invest time and energy in recruiting right candidate at right time for right job. The costs of a poor selection decision are substantial to both parties and often extend over many years.

Principles of Recruitment and selection

All stages of the recruitment and selection process must conform to the provisions of the encompassing legislation,some of them are :

Human Rights Act 1993

The Immigration Act 1987

Privacy Act 1993

State Sector Act 1988 

Procedures:

Every organization has its own recruitment and selection procedure but more or less there are similarities. Below diagram is showing one of the process of  recruitment and selection.

Useful Links and Websites

Wellington City Council - Information about Wellington city.

New Zealand Legislation - Acts of Parliament, regulations, bills, and Supplementary Order Papers.

Department of Labour - Details of employment, legislation.

HRINZ - Human Resource Institute of New Zealand.

IRD - Department of tax.

Holidays - Details of public holidays 2010 - 2013.

Welcome

My name is Neha, I am Human Resource post-graduate from India; I recently moved to NZ and had trouble finding information about various policies and legislation in NZ. This blog is my attempt to help fellow HR professionals, who are new to NZ.

I may not have got enough experience on my CV to guide someone in the field of Human Resource but I know enough to help new comers in NZ.  I firmly believe that if young and energetic Obama can rule mighty America then I can also help young HR professionals through this blog.