Post-election employment law changes

Significant changes to employment law are on the horizon following Labour’s election victory. These proposed changes are detailed in its Workplace Relations and Safety Manifesto policies. Employers need to ensure that they keep on top of what these changes mean for them.

Minimum Wage

The minimum wage will increase from $18.90 to $20 per hour on 1 April 2021.

Living Wage Guarantee

The current guaranteed ‘living wage’ for those employed by accredited Living Wage Employers is set at $22.10 per hour. Living wage guarantees are to be extended to public service contractors, starting with cleaners, caterers and security guards. It is expected this will be further extended to all employees working in the public sector.

Sick leave

Minimum sick leave entitlements are set to increase from five days to ten days a year in 2021. The maximum amount of sick leave an employee can accumulate will remain at 20 working days.This change will impact all employees once they have worked for six continuous months and is expected to be in force early next year.

Pay Equity

The Equal Pay Amendment Act 2020 has introduced a new process for employees and unions to raise and consider claims of systemic sex-based pay undervaluation in female dominated occupations.

Fair Pay Agreements

Fair Pay Agreements (“FPA”) which have been in force in Australia for over nine years are to be introduced in New Zealand in 2021. This new form of collective bargaining aims to set fair, basic employment conditions across industries. They contain a minimum set of employment terms and conditions for all workers in an industry or occupation covered by that agreement. A FPA sits alongside employment agreements. A government working group is to make recommendations to Cabinet by the end of the year and new legislation for a Fair Pay Agreement system should be in force in 2021.

Holidays Act 2003

The Holidays Act Taskforce has provided recommendations to improve the Holidays Act. These include simplifying leave calculations, allowing employees to take sick and annual leave when needed, and allowing leave to accrue over time. The new regime is expected to be in force later in 2021.

Protecting Vulnerable Workers

New legislation in 2021 will provide greater protections for ‘independent’ contractor arrangements. This change extends basic employment rights to a relatively new category of worker that has been identified as vulnerable people who operate their own business, but are effectively employees under the control of an employer. Security guards will also be recognised as vulnerable workers.