New Zealand Payroll

Everything you need to know about paying your NZ based staff

Changes to Employment Agreements

09 May 2020- 8 min read

Operations

Changes to Employment Agreements must be the result of a good faith negotiation. Changes then need to be reflected in the configuration of your payroll. They will affect how leave is calculated and paid.

There is some guidance here: https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/coronavirus-workplace/changing-an-employees-work-arrangements/

While employees were not working, we recommended using Leave Without Pay as short-term method for having your employee's pay correctly.

Now that employees are starting to return to work, KeyLink needs to know if you have:

  1. Reduced employee's standard hours
  2. Reduced employee's rate. Note that this can't result in a rate lower than the minimum wage of $18.90 per hour

Reduced Standard Hours

We will update employee's new standard hours in our system.
You will need to tell us whether you want the employee's Annual Leave balances adjusted.
As Annual Leave is technically managed as weeks, and the conversion to hours or days is so that employers and employees can work with it more easily, balances should be adjusted to reflect the employee's new working week.
In practice this generates lots of questions, and work doing the conversion.
In addition the adjustments will all need to be done again if and when employees return to their old arrangement.

If you are planning to reduce Standard Hours, please call us to discuss.

Reduced Rate

We will update the employee's rate in our system.
There is no affect on Leave Balances
Annual Leave will be paid at the employee's 52 week average as it will be higher than their new ordinary rate.
Other Leave will be paid at the employee's new rate.

If and when you return the employee's rates again, their Annual Leave rate will probably increase
Other Leave will be paid at the employee's new rate.

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Operations

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Evan Lyon

Evan Lyon

KeyLink owner, 25+ years experience in designing, building and running mission critical IT systems. More than 12 years experience supporting and using payroll systems.

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