Changes Employee Entitlements

Employment Legislation Change

There are some big law changes to employee entitlements on the horizon so check out a summary below to ensure you are in the know.

A New Minimum Wage

From April 1st 2021, the minimum wage is increasing. As an employer you need to ensure your payroll systems, processes and employment agreements are updated accordingly.

The changes include:

  • The adult minimum wage (for employees 16 years or over) will increase from $18.90 to $20.00 per hour.
  • The starting-out and training minimum wage rates will increase from $15.12 to $16.00 per hour.

This wage increase is something that we have come to expect each year. Having a proactive approach and plan in place is important. If your business is impacted and you need support, or if you have any questions about eligibility contact us.

Possible Changes to Employee Leave Entitlements

As an employer, you have probably experienced the challenges of navigating and understanding your payroll obligations. For years, the Holidays Act 2003 has created complexities for modern employers. Entitlement and calculation methods are geared around the traditional five days/40 hours per week worker. This doesn’t suit many businesses. Moreover it has led to a lot of wasted time and costly mistakes for many employers, small and large.

We recognise that this is not the typical arrangement for most workers. So too did the Holidays Act Taskforce that was established to review the Act and provide recommendations for improvement.

Earlier this year, the Government indicated it would likely adopt their recommendations and we can now expect to see these legislative changes as early as 2022. These changes will provide a clearer set of rules and guidelines for employers. In addition, they will give employers greater confidence when providing entitlements to, and payments for, employee leave.

Summary of Recommendations

So what changes can we expect to see? The changes are extensive, but here is a summary of some of the significant recommendations:

  • New calculations for how much an employee should be paid for all leave types.
  • Employees being entitled to take annual holidays within the first 12 months of employment.
  • Eligible employees will be entitled to bereavement leave, family violence leave, and will begin accruing sick leave from their first day of employment.
  • Bereavement leave will be expanded so that employees can access more leave for more family members, including cultural family groups and modern family structures.
  • A change to how annual leave is calculated for new parents who have returned from parental leave.
  • A requirement to provide pay slips that detail used and remaining leave entitlements and their calculations.

Further to the above Taskforce recommendations, a Holidays Act Amendment Bill is anticipated to pass this year which will see Sick Leave entitlements increase from 5 days to 10 days per year.

We expect to see more details later in 2021 regarding these changes, including effective dates. As these are significant changes, businesses will be given plenty of time to prepare, which will include the need to update your employment agreements, internal policies and payroll processes.

When the time comes, FixHR will be here and ready to support if needed. Contact us if you would like further information and or advice on existing obligations and employee entitlements.

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