Employer Compliance is critical to business success

What do you know about your employment law obligations?

New Zealand employment laws encourage fair and positive employment relationships. It’s important that you understand your obligations and legal rights as an employer, and that your business is compliant with employment law and HR best practice.

The cost associated with breaching employment laws far outweighs investing in best practice HR.

Our HR Compliance Audit will assess potential risks to your business.

During the HR Compliance Audit process, we assess a company’s compliance with employment law and HR best practice to ensure there is no breach of employment law or NZ Immigration.

We look at HR documentation, systems, processes, and procedures to identify:

  • Potential risks from prosecution or employee personal grievances
  • Any poor organisation or duplication of activities and resources that may be causing decreased productivity
  • The strategic capability of the business – is there a plan for future changes in the industry business environment?

We take a very thorough look at your HR infrastructure.

Our focus is on ensuring your HR capability supports your business strategy. The things we look at include:

  • Employment agreements
  • Job descriptions
  • Employee handbooks
  • Manuals
  • Policies
  • Guidelines
  • Correspondence with staff

We also look at general HR practice, such as:

  • Time and wage records
  • Payroll
  • Disciplinary processes and procedures
  • Performance management
  • HR capability and resourcing
  • Training and development
  • Remuneration
  • Recruitment and retention
  • Immigration

Why do we focus on employer compliance?

Here’s a story that tells the story.

Company A, a medium size NZ company had a migrant employee visa application declined due to a payroll compliance problem.

The Company will also need to apply for Compulsory Immigration Employer Accreditation (which comes into force in 2021).

Following a detailed HR Compliance Audit, looking into all their employment documentation, systems, processes and HR capability and resourcing, we discovered Company A was in breach of the Holidays Act 2003 and owed a significant amount of money in backpay due to an incorrect payment calculation setting in their payroll software and misunderstanding of the law by their payroll staff.

According to Employment New Zealand, employers who receive a penalty for a breach will be viewed as non-compliant with New Zealand employment law. And face a set stand-down period from the ability to support a visa application.

A stand-down period starts when an infringement notice is issued by a Labour Inspector, a penalty is ordered by the Employment Relations Authority, or a more serious sanction is ordered by the Employment Court for a breach of employment standards.

Fortunately, Company A was able to proactively fix their breach of employment law before any such infringement notice was issued, avoiding prosecution and, potentially, the loss of their right to hire migrant workers.

The HR Compliance Audit also found Company A to have the following issues:

  • A significant number of standard HR documents did not exist
  • There was significant risk of employees taking personal grievances; if successful, they would carry a large financial and legal liability
  • Whilst there were some solid HR templates, Company A did not appear to employ HR best practice across all facets of the operation, and the implementation and usage of the templates was not always compliant. They had purchased templates without understanding how to adapt them
  • Poor record keeping and storage of documentation
  • No systematic reporting structure or clear lines of communication between the HR department and Management – some crucial decisions were being made without the knowledge of the Directors
  • HR capability appeared to be below the desirable standard expected of an organisation of that size and complexity to meet legal obligations
  • Little or no strategic HR capability with no identified workforce strategy to mitigate future environmental risks, such as the loss of its migrant workforce.

Company A had spent a large amount of money on HR templates and initial set up costs. However, they had underinvested in HR capability, from both a compliance risk and strategic perspective, putting the business at real risk of breaching employment law.

The moral of the story?

Templates can be a great tool but ultimately can’t replace technical expertise, years of strategic HR experience and human input.

Let's talk about HR Compliance.