Commercial & Business, Employment & Health and Safety, Law Changes

Alert for Employers and Employees: Employment reforms in 2021

Alert for Employers and Employees

Minimum wage increase in effect from 1 April 2021

On 1 April 2021 the Adult Minimum Wage increased to $20.00 per hour, and the Starting Out Minimum Wage and Training Minimum Wage increased to $16.00 per hour (being 80% of adult rate).

It is recommended that employers regularly review their payroll systems and employment agreements to ensure that employees are not being paid below the minimum wage. It is also critical that employers monitor the hours their salaried employees are working to ensure that the Minimum Wage Act 1983 is not breached.

Changes on the horizon for 2021 and onward

Increasing sick leave entitlements

Last year the Government introduced the Holidays (Increasing Sick Leave) Amendment Bill to increase the minimum employee sick leave entitlement from 5 days per year to 10 days per year. The Bill proposes that:

  • the maximum amount of unused sick leave available would remain at 20 days;
    the increased entitlement would be available on the employee’s next sick leave entitlement date after the law commences, as opposed to all employees receiving the additional sick leave on the same day; and
  • the entitlement is not dependent on the employee’s work pattern.

The Bill is expected to pass in mid-2021 with any changes coming into force two months after Royal assent.

Review of the Holidays Act 2003

The dedicated Holidays Act Review Taskforce which was established in May 2018 has now reported back to the Minister for Workplace Relations and Safety and provided numerous recommendations to the Government on how to simplify the Holidays Act 2003. The Government has accepted all of the Taskforce’s recommended changes, and it is expected that legislation will be introduced in early 2022.

Reform of the Holidays Act is expected to be helpful to both employees and employers to provide certainty and clarity around this area of law.

Matariki to be introduced as a public holiday

It has been announced that Matariki will be first celebrated as a public holiday on 24 June 2022. This will be New Zealand’s 12th public holiday. Legislation will be introduced later this year to amend the Holidays Act and add the additional public holiday.

If you would like advice on this topic or any other employment related issue, please contact us.