The Labour government has signalled that we should expect to see some of the campaign promises to reform employment law implemented during this term. So, what were these promises, and will you be impacted? We outline the seven proposed changes below:
- Increasing sick leave entitlements: Labour pledged to increase the minimum entitlement of paid sick leave from five days to ten days. On 30 November 2020 the Government announced that it has introduced a bill to achieve this law change, which is expected to come into force halfway through 2021.The Government has said that the catalyst for this change was Covid-19, showing the importance of ensuring that workers are able to stay home if they are sick to stop the spread of illness. However, the bill will not change the maximum number of days that employees can stockpile which will stay at 20 days.
- Increasing the minimum wage: Labour promised to increase the minimum wage from $18.90 per hour to $20 per hour in 2021. Additionally, Labour plans to require all public service contracted security guards, cleaners and caterers to be paid the living wage, currently $22.10 per hour.
- Reviewing the Holidays Act 2003: Labour also pledged to strengthen and simplify the Holidays Act 2003, citing the current lack of guidance on how it works, poor implementation by payroll systems and lack of transparency in holiday pay calculations. How exactly they will achieve this is yet to be determined. However, a reform of the Act is well overdue and will be helpful to both employees and employers.
- Matariki to be introduced as a public holiday: Labour also promised to introduce Matariki as a public holiday from 2022. This would be New Zealand’s 12th public holiday. The exact date of the public holiday is yet to be announced, however it has been proposed to fall somewhere between the ‘long run’ with no public holidays between Queens Birthday in June and Labour Day in October.
- Fair pay agreements: Labour said that they would make it easier for workers to receive fair wages and conditions and avoid the ‘race to the bottom’ that occurs within competitive industries by implementing Fair Pay Agreements (FPAs). FPAs would set minimum terms and conditions of employment across an entire industry or occupation.
- Pay equity: Labour also promised to make it easier for women to gain pay equity in their organisation or across their industry. How this would be achieved has not been identified with any specificity, but broadly Labour has stated that it would ensure that there are better records of pay equity across New Zealand, including by ethnicity and age as well as gender.
- Flexi-wage subsidy: Finally, Labour announced that it would expand the Flexi-wage programme to support more people get back into work.The Flexi-wage programme is a subsidy programme to support people who are at risk of long-term unemployment and who are receiving a benefit to assist in training for skills to lead into employment. Employers receive a subsidy to hire people who may require extra training or support, or who are likely to be hardest hit by the economic impact of Covid-19.
If you’re an employer needing assistance, we can help. Contact our employment law team.