Employment law shake-up – what we know so far…

There is a new government in place and changes to New Zealand’s employment law are on the horizon.

The new coalition government consisting of the Labour Party, New Zealand First, and the Green party, was officially sworn in last week, bringing new ideas surrounding employment law policies to the table.

Although there is still some uncertainty over policy changes to be implemented over the next three years, there are some areas the coalition government have agreed on.

Minimum wage increase

The minimum wage is set to increase from $15.75 per hour to $20 per hour by 2020, with the final increase to take effect in April 2021.

Currently, the minimum wage is $15.75, the living wage is $20.20. It has been reported that the incremental increase will begin next April, with the minimum wage expected to rise from $15.75 to $16.50.

Prime Minister Jacinda Ardern has stated that the government is looking at options to offset some of the impact that this will have on small businesses. These options include considering opportunities like the Australian model ‘stepped tax’ bracket, which sees businesses with lower turnovers pay a lower tax rate.

Immigration – work visas

The coalition government has also confirmed it will be ensuring that work visas issued ‘reflect genuine skills shortages’.

Although the government has yet to elaborate on this, it is highly likely businesses will have to further prove there is a need for skilled migrants and that they have exhausted all avenues of finding a suitable candidate for the role.

What next for your business?

There has been a lot of speculation over employment law and which, if any, of the parties’ employment policy changes announced in the run-up to the election will be implemented and how they will affect New Zealand businesses.

The coalition government has yet to make any further announcements surrounding this; however businesses need to be aware and prepared for change to current employment relations.

Steve Kennedy, Principal Consultant at EQ Consultants, advises: “The new government have been sitting on the opposite benches for the last nine years and been unhappy with the changes made to employment conditions over that time. Now they have their hand on the tiller we can expect to see a raft of changes in the months to follow.

“For employers, it will be important they have good HR practices in place now so any changes do not have a detrimental impact on their business. For example, with the immigration rules set to change, demand for talent will be a hot topic for many employers so retaining people will be critical.”

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If you have any further questions surrounding employment law in your business, please call (03) 366 4034 or email info@eqconsultants.co.nz