With the change in government, the landscape for employees and employers is changing.

Here are two of the main changes that will affect many employees and employers across New Zealand.

90-day trial periods

Starting from December 23, 2023, every employer in New Zealand, regardless of their size, can now implement 90-day trial periods. Before this date, these trial periods were exclusive to employers with fewer than 20 employees. Now, all employers can utilise these trial periods.

A 90-day trial period provides employers with greater confidence when hiring new employees but provides less security for employees.

What you should know about 90-day trials:

• Before an employee begins their job, the employer and employee need to mutually agree in writing and in good faith to a trial period, as part of their employment agreement.
• The extension of 90-day trials will not affect other aspects of employment relations, such as the requirement to act in good faith, or worker protections regarding pay, conditions, leave, and health and safety.
• If employers are hiring people on certain work visas, they will also need to consider any immigration requirements relating to the use of trial periods. On January 6, 2024, the Worker Protection (Migrant and other Employees) Act 2023 takes effect, reinforcing immigration and employment regulations to enhance the safeguarding of employees from exploitation.

Repeal of Fair Pay Agreements legislation

As of December 20, 2023, the Fair Pay Agreements (FPA) Act has been repealed. However, rights and obligations under other employment laws remain applicable for employers. Despite this change, employers, unions, and employees are still encouraged to work together to agree on suitable employment terms.

If your organisation currently holds any personal information collected for the purpose of the Fair Pay Agreement activities, including bargaining, it must now be disposed of in line with the privacy laws. The Office of the Privacy Commissioner explains how you can do this.

Disposing of information and documents safely – Office of the Privacy Commissioner

Update to Minimum Wage Rates

The Government has also announced an increase in minimum wage rates from Monday, 1 April 2024.

The details of the increase are:

• Adult minimum wage will go up from $22.70 to $23.15 per hour.
• Starting-out and training minimum wage will go up from $18.16 to $18.52 per hour.
• All rates are before tax and any lawful deductions, for example, PAYE tax, student loan repayment, and child support.

If you are an employer or an employee - now is also an ideal time to ensure you know the details around the minimum wage, including that:

• It applies to all hours worked, unless both parties agree to a higher rate in the employment agreement.
• It applies to employees paid with a salary, or piece rates, or commission.

Note the minimum wage does not apply in some situations including:

• Employees under the age of 16.
• Where a Labour Inspector has issued a minimum wage exemption permit to an employee who has a disability that limits them carrying out the requirements of their work.

How we can help

At Checketts McKay Law, we can help employees and employers work through any employment issues from preparing and reviewing employment contracts to dealing with personal grievances, we have an experienced team of employment lawyers ready to assist. For more information, please visit our website here www.cmlaw.co.nz and know you can always find us under Professional Services in The Central App.