Is your payroll compliant?
Some employers have had issues come up due to complaints from staff, whilst others have been found to be non-compliant due to an MBIE investigation following a complaint of worker exploitation.
Whether you employ migrant workers, New Zealand Citizens or permanent residents you need to ensure your payroll is correctly set up, particularly with Holidays Act compliance.
Your payroll software
Most of the common payroll software used in New Zealand was not actually developed here. Despite assurances from the software developers that they are compliant, some major payroll software systems have been found to have errors in their back end calculations due to assumptions imported from another country’s setup (most commonly Australia).
You need to be confident that your payroll system is set up correctly:
to pay the right holiday pay
to pay the right entitlements to employees on varying types of employment agreements and contracts
with the correct calculations pertaining to Relevant Daily Pay and Average Daily Pay
to track all required wage and time records
Payroll setup questions are not usually written in a way that complies with our employment legislation. It can be easy to misunderstand and make a mistake with downstream consequences.
You should always have your payroll system checked by an independent payroll specialist to ensure compliance.
Call us to discuss any concerns you have about your payroll system
The Holidays Act
It is very rare that we find full compliance with the Holidays Act, particularly for companies that do not work a simple Monday to Friday roster.
Factors such as overtime, working on public holidays, commissions, bonus payments and contract types all have an impact on holiday pay.
If an irregularity is discovered by the Ministry of Business, Innovation, and Employment (MBIE) then you may be subject to an improvement notice or a fine. In any case, you will be obliged to establish if any back pay is owed to staff and pay this.
It is important to point out that back pay must be paid to all current and ex-staff members going back 6 years, and therefore you will need 7 years of good records.
Failure to comply with payroll and employment law can also block you from being able to support migrant employees for a visa.
Immigration can assess you as non-compliant during a single visa application, or due to them formally including you on the list of employers that are blacklisted and subject to a formal stand-down period.
If you are relying on key migrant workers to supply key skills this can have a seriously damaging effect on your business.
Don't leave it to chance
Contact us to discuss any concerns about your payroll system or to review things BEFORE you have a problem.