Business fundamentals

Employment law changes: what they mean for you

3 min read

When our new coalition government was sworn in late last year it brought with it an expectation that some changes were afoot in our employment law.

We’ve since seen a number of announcements relating to changes in a range of areas of our employment landscape, and for small business employers, already busy juggling their ‘day job’ with the responsibilities of business ownership, it can be hard to get a steer on what the changes are, and which apply to their specific situation. 

Increase in minimum wage

One of the biggest changes potentially affecting small businesses that’s soon to come down the pipeline is an increase in the minimum wage. From 1 April, this will rise by 75 cents to $16.50 per hour, with further increases leading towards a targeted $20 by April 2021. For many employers, the cost pressures associated with these increases will be a hot topic. 

Paid parental leave

We’re also on the cusp of changes to paid parental leave, which will increase from 18 to 22 weeks from this July, again with further increases leading towards a targeted 26 weeks of paid parental leave from 1 July 2020.

Scrapping of the 90-day trial period

One of the most discussed changes to employment law recently, however, has been the scrapping of 90-day trial periods. While this is on the horizon for larger businesses, the Labour-led Government’s Employment Relations Amendment Bill will allow small businesses (with fewer than 20 employees) to continue using 90-day trials, in an effort to keep their barriers to hiring low.

Reinstatement as a primary remedy for unjustified dismissal

Also among the Bill’s modifications relating to the rights of employees is that reinstatement will be restored as a primary remedy to unjustified dismissal. Given many small businesses operate almost like families, the ramifications of a reinstatement following what’s deemed an unjustified dismissal can potentially be highly challenging and complex. The handling of employment disputes is an area where many small business owners express unease, and changes like these are a timely reminder to smaller employers that they need to adequately educate themselves on how to correctly handle these types of situations.

There’s no doubt that’s a challenge. Keeping up with ongoing legislative changes and increasing compliance demands (such as those brought about with recent health and safety reforms) puts greater cost and time pressures on small business owners who, as we’ve mentioned, are often already stretched. And without a raft of specialist support staff around them, such as the HR practitioners you’d typically have in larger firms, small business employers can find themselves in situations where they simply don’t know what they don’t know.

Protect yourself

Building trusted relationships with good advisors, therefore, is a key to staying on top of legislative changes and your obligations as an employer. Outsourcing certain aspects of your employment requirements to external specialists can also be helpful, or investigating the growing range of software tools that can specifically help small businesses manage their compliance and HR needs. 

This blog is solely for information purposes (and is only for New Zealand residents]. None of the matters in this blog are personalised advice and no representation or warranty is made as to the accuracy, reliability or completeness of any statement made in this blog. Neither BNZ nor any person involved in the preparation of this blog accepts any liability for any loss or damage arising out of the use of, or reliance on, all or any part of this blog. The information and recommendations are the personal views of the author and do not necessarily reflect the views of BNZ.