Even with the mandating of the COVID vaccination for many organisations, employers still need to follow a process before deciding to terminate employment. An employer’s good faith obligations remain.
Minimum Wage Increase 1 April
The minimum wage went from $17.70 to $18.90. If you are paying the $585.80 subsidy value, and not topping up, and require employees to work, you still have to meet the minimum wage requirements. That means an employee receiving $585.80 can work up to 31 hours a week (subject to written agreement to change their terms and conditions).
Changes to hours and pay must be agreed in writing
If you are no longer paying an employee the amount specified in their Employment Agreement, or in the absence of an up to date one what you normally pay them, you can only do this if you have their agreement in writing. If you had their verbal agreement, now is the time to follow up on the paperwork. Send an email, text or whatever written communication method you are using, setting out what was agreed and ask them to message/text/email you back with a simple ‘I agree’. Employer and employee obligations still apply, so don’t forget to tell them they can seek independent advice before agreeing.
Wage claims can be backdated 6 years
A wage claim is not the same as a personal grievance (PG). Where a PG in most circumstances must be raised within 90 days, an employee has 6 years to raise an unpaid wage claim. So please take heed of the advice above, and get any reductions in pay agreed in writing.
Distributing the subsidy
The Ministry of Social Development Q&A suggests that where an employee’s normal pay is less than the subsidy, the employer can redistribute the remainder to others. It is our view that this is wrong, and quite contrary to the declaration the employer signed to claim the money. We suggest having a separate bank account to hold the subsidy money in, and drawing on it each pay period. This will provide clear evidence you have used it in the way required and any unspent subsidy can be returned to MSD.
Salary thresholds for Skilled Migrant Resident Visas and Essential Skills Work Visas
If you have an employee working under these types of visa there is a requirement to pay them a minimum salary/wages (this is different to the minimum wage). It is significantly above the $585.80 weekly subsidy. The government has advised they are working on a solution for this. In the meantime you are still required to pay the minimum specified by the visa requirements.