New Government, New Employment Laws – More costs for Employers…

 

With the coalition deals now signed off and the new Government officially sworn in, it is time to dissect the proposed changes and what they will mean for businesses. 

Already announced is the intention to increase the minimum wage to $20 per hour by April 2021, starting with an increase to $16.5 per hour in April 2018. Not surprisingly this has led to mixed reactions from business owners and employees.

Many business owners have expressed concern about how this will impact their costs and are concerned that this would need to be passed on to their customers.

There has been suggestion that the Government will introduce tax cuts to help small businesses deal with this increase, however nothing has been confirmed at this stage.  Without assistance to counterbalance the increases, there is a high chance that businesses would need to inflate prices at the disadvantage of the consumer, or face making employees redundant.

The other significant change which has been announced is the increase in paid parental leave. Currently at 18 weeks, the increase is set to be completed in increments, with an increase to 22 weeks by July 2018 and then a further increase to 26 weeks by July 2020.

Prime Minister Jacinda Adern exclaimed that she hoped that increase in time off would make it more likely for an employee to return to work, but also acknowledges that finding someone to replace staff for longer could prove tougher for some businesses.

The Green Party are advocating for an increase in sick leave days from 5 to 10 days per year and would like to improve the rights of casual or temporary workers, as well as introducing an equal pay agreement for woman in the workplace.

New Zealand First support the increase to the minimum wage however they want to take this further by abolishing the starting rate and removing a secondary tax on employment. They are also promoting a change to redundancy provisions and want to set a minimum redundancy notice provision at double what is currently in place, up to 13 weeks. They have also suggested introducing a paid paternal leave of 2 weeks which would increase over time to 4 weeks. They are the only party to have suggested changes with regards to health and safety and are requesting a review of the Health and Safety at Work Act aiming to remove the bureaucratic process from this.

At this time there is still a lot of uncertainty around which policies will progress and which will fall to the wayside, the only confirmed changes are the increase to minimum wage and paid parental leave.

As new changes are introduced we will update you and advise how they may affect your business.