A Round-Up of New Zealand’s 2021 Labor Law Changes

 

New Zealand’s government is set to introduce employment reforms that will be implemented throughout 2021. These reforms aim to improve the employer-employee relationship and enhance the working conditions of individuals working in New Zealand. A few of the major employment reforms include an increase in the minimum wage, improvement of pay equity and sick leave extension, fair pay agreements, and reforms for dependent contractors. These reforms have been drafted to ensure worker safety, and these rights are extended to migrant employees as well. 

Increase in Minimum Wage 

In effect since April 1, 2021, the minimum wage of New Zealand has increased from NZD 18.90/hour to NZD 20/hour for employees over 18 years of age. For trainees and employees just starting, the minimum wage increased from NZD 15.12/hour to NZD 16/hour.

Strict protocols are being followed by government officials to ensure that all employees are receiving at least the minimum wage. This minimum wage is extended to all national employees and foreign workers, regardless of how they receive their pay. Employers must ensure that all their employees are being paid the minimum wage according to the number of hours worked per month. 

Pay Gap Reforms 

New Zealand has introduced reforms that will ensure all employees are paid equally and aren’t subjected to discrimination of any kind. Companies and firms are encouraged to hire more female employees if they have the qualifications. Through the Pay Equity Amendment Act 2020, employers are forbidden to pay lower wages to their employees based on their gender, ethnicity, and age. 

Sick Leave Extension 

If an employee has been working under the same employer for six months, they are entitled to a sick leave period of 5 days. The Holidays Amendment Bill now allows an extension of sick leave for up to 10 days, starting December 2020. No matter what the employment contract suggests, and regardless of the contractual agreement between employee and employer, all workers, foreign and national, are entitled to the sick leave extension. 

Dependent Contractors 

Dependent contractors have their business practice and equipment, but they are still subject to company regulations to receive the other half of their income. Drivers for ride-sharing and ride-booking companies can be considered dependent contractors. Even though dependent contractors have relatively more freedom than contract-based employment, such as they can set the number of hours they work per day – they still experience difficulty securing their employment rights. 

The reforms provide clear guidelines for dependent contractors and give them relatively more bargaining power. The reforms also minimize the control of companies that hire these individuals for their services. 

 

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