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Guide

Employment Leave Act Passed. What are the Changes You Need to Know?

Changes to employee leave marks a significant reform milestone of New Zealand's employment legislation. Created to replace the current Holidays Act 2003, the framework of the Employment Leve Act has been designed to make annual leave more transparent and easier for business owners and employees to understand. While this is a major change to how you as a business owner will need to calculate and manage leave entitlements, you don’t need to take any immediate action. The New Zealand Government has built in a 24-month transition period, starting on 7 August 2026, before the new leave system is fully in effect. This provides you with the necessary time to update business systems, employee forms and contacts, and discuss the changes with your team to ensure a smooth transfer. What is changing? The new legislation simplifies leave calculations and improves clarity for business owners and employees. Current system: All employees are entitled to four weeks’ annual leave after twelve months’ continuous employment. New system: Employees start accruing annual leave from their first day of employment. This is calculated at a rate of no-less than 0.0769 hours per standard hour worked. This equates to four weeks’ leave for employees who's standard 38 hour week does not change during a year. Annual and sick leave will also accrue in hours rather than weeks or days. This is based on an employee's standard hours of work. Sick leave accrues at 0.0385 hours per standard hour worked. Annual, sick, bereavement, and family violence leave become available from the first day of employment. A single hourly rate will be used to calculate all leave payments. A new 12.5% Leave Compensation Payment will apply to additional and casual hours worked, instead of accruing annual and sick leave based on those hours. Payslips will be mandatory and will need to include more details about leave and pay information, making entitlements easier to understand. Employees will be able to cash up to 25% of their annual leave balance each year. A new "Otherwise Working Day" test will determine leave entitlements for employees with irregular work patterns. The penalty relating to annual leave payments for employees returning from parental leave will be removed. To help you with the transition of calculating leave, the Act includes detailed formulas so you can convert existing employee leave balances from weeks and days into hours. When the new Act officially comes into force in August 2028, the converted leave will be paid as if it were leave accrued under the new Act. Transitioning to the new legislation The 24-month implementation period: There will be a 24-month implementation period between when the Act received Royal assent and when it comes into force on 6 August 2028. This provides time for payroll providers and employers to make necessary changes to business systems. Until the Holidays Act 2003 is repealed and the new Act comes into force in 2028, all existing rules still apply. This means you still must comply with the current Holidays Act and ensure you’re providing your employees with the correct entitlements and payments. Three years to update your employment agreements After the Act officially comes into force on 6 August 2028, there will be an additional year for employers and employees to agree to contract terms consistent with the new legislation framework (for example, by providing a compliant accrual rate for annual leave). In that year, if terms have not been updated, employers must comply with any provisions in the employment agreement more favourable than those in the Act. If employment agreements are not updated one year after the Act comes into force, new minimum statutory terms override any conflicting provisions in employment agreements. This provides you and your employees with an opportunity to proactively negotiate employment agreements. Casual employees Current system: Employers and workers can agree to pay 8% of gross earnings each pay period instead of paid annual leave if work is intermittent or irregular, but use of “Pay as you go” is not required. For sick leave, many casual workers do, technically, become entitled to sick leave – although they are unlikely to benefit from this entitlement in practice due to impracticality and compliance issues. New system: As in the case of additional hours, a leave compensation payment (LCP) (set at a rate of 12.5% of a worker’s ordinary hourly rate) will be paid for each ‘casual’ hour of work in every pay period, instead of that work accruing annual and sick leave. What does this mean for employers? At this stage, the most important message is: Business as usual continues for now. Current Holidays Act requirements remain in place until the new legislation comes into force 6 August 2028. This two-year lead-in period to allow for payroll and system changes. A year will be available after 6 August 2028 to update employment agreements where necessary. What should you do next? Before making any changes to your current business operations, as an employer it’s recommended you: Continue complying with the current Holidays Act 2003 requirements and obligations. Stay up to date with new information as it becomes available from the MBIE. Consider how the new hours-based accrual leave system could affect your workforce and payroll processes. Peninsula is here to help This reform represents one of the most significant changes to leave legislation in decades. However, the transition timeframe has been intentionally designed to give your business and employees time to understand the changes, update systems, and implement any necessary adjustments without causing disruption to your business operations. Peninsula will continue to provide practical guidance as further information becomes available. Need help understanding New Zealand’s Employment Leave Act? Peninsula can help. Our team provides 24/7 advice for your business and industry. Call us on 0800 215 024. Please Note: This article is general information only. The contents of this article does not constitute legal advice and is not intended to be a substitute for legal or other professional advice and should not be relied upon as such. Your specific circumstances after publication may affect the completeness or accuracy of this information. To the maximum extent permitted by law, we disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, currency and reliability of the information on this website, and to seek professional advice where necessary. Nothing contained on this website is to be interpreted as a recommendation to use any product, process or formulation. For clarity, Peninsula does not recommend any material, products or services of any third parties.

Guide

Shift Work and On-Call Allowance

For many New Zealand businesses, the lights never go out. From bustling hospitals and emergency services to late-night convenience stores and early-bird bakeries, shift work forms the backbone of countless industries. But keeping your doors open 24/7 comes with unique challenges, particularly regarding fair compensation and legal compliance for shift workers and those employees on-call.  This guide unpacks the complexities of shift work in New Zealand, equipping you with the knowledge to confidently navigate on-call allowances, shift penalties, and legal requirements.   What is shift work?  In New Zealand, shift work is usually characterised by variable working hours outside standard business hours (e.g., 9 am-5 pm). It often involves rotating rosters, nights, weekends or public holidays.   Examples of shift work Many New Zealand businesses rely on shift workers to keep things running seamlessly 24 hours a day, seven days a week. Shifts may be arranged in a number of ways, including:   Early morning shift: Starting before 7:00am.  Late night: Finishing after 10:00pm.  Night shift: Working primarily through the night (e.g., 10:00pm - 6:00am).  Rotating roster: Cycles through different start and finish times.  Weekend shift: Working Saturdays and Sundays.  On-call: Available outside scheduled shifts for emergencies or short-notice tasks.  These schedules may be fixed (the employee is expected to work the same schedule each week) or variable (the employee is expected to work a rotating schedule of different shifts at different times of the day). They may also be required to be available to work on request at any time of day (on-call).  The nature of the schedule – and what an agreement or contract deems as standard hours – may affect the type of penalties an employee receives.   What are shift workers?  According to the Holidays Act 2003, a ‘shift worker’ is defined as, ‘an employee who is employed to work regularly at different times on different days.’ This definition focuses on the variable nature of a shift worker's schedule compared to standard business hours.   Shift workers come from diverse professions, including:  Healthcare professionals: Nurses, doctors, and hospital staff.  Emergency services: Police officers, firefighters, and ambulance personnel.  Retail workers: Supermarket staff, convenience store employees and petrol station attendants.  Transport workers: Bus drivers, taxi drivers and airline staff.  Hospitality staff: Chefs, bartenders, and hotel receptionists.  Manufacturing and production workers: Factory workers and assembly line operators.  What are shift penal rates?  In New Zealand, penal rates are considered a form overtime pay. These rates are higher than employees’ ordinary hourly rates and are designed to compensate them for the disruption and inconvenience of working outside standard business hours.  Are employers required to pay shift penal rates in New Zealand?   While not required by law (except for public holiday penal rates), shift penal rates are commonly included in employment contracts and negotiated between unions and employers in collective agreements.  Night shift rates   Night shift work can be physically and mentally demanding due to disrupted sleep patterns and circadian rhythms. To compensate for these challenges, New Zealand businesses may pay higher night shift allowance rates. In some industries, this is mandated in collective agreements. The night shift penal rate an employer pays depends on the employment agreement in place.   On-call rates  Being on-call means being available to work outside your scheduled hours for emergencies or short-notice tasks. While not actively working, you're essentially ‘on standby,’ ready to respond when needed. On-call allowances compensate for this disruption and potential loss of personal time.   In New Zealand, employers must pay ‘reasonable compensation’ to employees for being on-call. Many industries have collective agreements in place to ensure employees are paid fairly and transparently for the time they are on-call, including sleepover wages, as well as any work they do if they are called out.   If you call an employee out to work, legally, you must pay them at least the hourly minimum wage. Some employers will pay the usual hourly wage, while others will pay extra.   When calculating a fair on-call rate for your employees, consider:   How many hours you expect the employee to be available (the longer the period, the higher the rate should be).  How this varies from their usual working hours.  Their usual hourly rate, wage, or salary.  How being on-call could restrict their activities.  Be clear about how an employee will be compensated for being on-call, which could be a flat fee for a set period of time, plus an hourly rate for call-outs (plus any applicable penal rates for public holidays, nights or weekends). You could also consider allowances like a paid day off in return for being on-call.   Shift penal rates vs. standard penal rates in New Zealand While the term ‘penal rate’ carries the same basic meaning in both scenarios — additional compensation for inconvenient work hours — there are key distinctions between shift penal rates and standard penal rates in New Zealand. Let's break it down.   Standard penal rates  Apply to specific days and times outside of standard business hours (e.g., weekends, public holidays, and nights).  Aim to compensate for the disruption to personal life and social activities associated with working these non-standard times.  Shift penal rates  Apply specifically to employees who work shifts as part of their regular work pattern.  Account for the disruption to sleep patterns and social life inherent with shift work.  Are often higher than standard penal rates due to the repetitive and ongoing nature of shift work.  Examples of where shift penal rates apply in New Zealand  Here are some real-life examples of situations where shift penal rates might apply:  1. Hospital nurse  A nurse works a regular night shift rotation from 10pm to 6am. In addition to their standard hourly rate, shift workers will receive a higher night shift allowance, which is typically more than the standard 10-20% night shift allowance due to the ongoing nature of their shift work.  2. Retail assistant  A supermarket employee works a rotating roster that includes weekend shifts (e.g., Friday nights and Sundays). They may receive the standard weekend penal rate (time and a half) for their weekend shifts, but their employment agreement might also include an additional weekend penalty rate for shift workers to acknowledge the disruption to their regular schedule.  3. Ambulance driver  An ambulance driver has an on-call roster, meaning they must be available outside their scheduled shifts to respond to emergencies. They'll receive the standard on-call allowance for being available, but their agreement might specify a higher on-call allowance for shift workers, considering the ongoing pressure and potential sleep disruption associated with their role.  4. Factory worker  A factory worker is part of a team that operates 24/7 production lines, requiring shift rotations. They'll likely receive night shift allowances and potentially an early morning allowance for shift workers if their shifts start before standard business hours.  Workplace health and safety for shift workers in New Zealand  Shift work presents unique health and safety challenges for employees due to disrupted sleep patterns and increased fatigue. As an employer in New Zealand, you have a legal and ethical responsibility to ensure the well-being of your shift workers, and this requires proactive measures beyond just fair financial compensation.  Regulations and responsibilities  The Health and Safety at Work Act 2015 (HSWA) establishes the fundamental duty of employers to ensure, as far as reasonably practicable, the health and safety of their workers, including those engaged in shift work. WorkSafe New Zealand is the government agency providing guidance and resources for managing workplace health and safety risks, including specific recommendations for shift work.  Key health and safety risks Fatigue: The most significant risk associated with shift work, leading to increased injury incidents, reduced productivity, and health issues like cardiovascular disease and diabetes.  Mental health: Disrupted sleep and social isolation, especially for lone workers, can contribute to anxiety, depression, and other mental health challenges. Musculoskeletal disorders: Awkward postures, repetitive movements, and heavy lifting during non-standard hours can exacerbate musculoskeletal issues.  Employer responsibilities These are some of the things you can do to ensure the safety and well-being of your shift workers. Our Health & Safety Checklist is a great place to start.   Conduct risk assessment: Identify potential health and safety risks specific to your shift work operations and the tasks involved.  Implement a fatigue management plan: This plan should outline strategies to minimise fatigue risks, such as rostering practices, fatigue awareness training and adequate rest breaks.  Promote healthy work practices: Encourage proper hydration, healthy eating habits, and access to natural light during shifts.  Provide support and resources: Offer confidential counselling services and access to health professionals trained in shift work challenges.  Regular consultation and communication: Actively engage with shift workers and their representatives to understand their concerns and tailor solutions accordingly.  Get expert advice on shift work and on-call allowances Shift workers are an integral part of many New Zealand businesses. Establishing the right pay and conditions for your people ensures you comply with legal requirements and sets your business up for long-term success. Understanding shift rates, overtime and on-call rates can be confusing, but it doesn’t have to be. Our team of HR and WHS experts are here to help you. Get in touch to discuss your needs today.   This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Guide

The Benefits of Employee Induction

When you're a business owner with multiple employees, having an effective induction program can help new employees quickly find their feet in your business. Helping them to immediately hit the ground running and have a positive impact. For the first few weeks, a new employee’s job, work environment and colleagues are all dauntingly unfamiliar. Simultaneously, there’s always lots to learn about the business and the responsibilities of their new role. For many new recruits, the whole onboarding process can be overwhelming. Creating a tailored induction program can help the latest addition to your team feel more comfortable in their new surroundings. It allows them to develop a better understanding of your company culture, the processes of the business, and fully grasp the expectations that come with their new role. What is induction? Employee induction is the process by which new employees are introduced to their new role and your organisation. It’s a crucial component of the onboarding process and gives a new staff member the chance to learn about the company’s values and culture. The new employee will often have a number of uncertainties, and induction is the point at which the details of their role are made clear. By the end of the induction process, the new recruit should know exactly what they’ll be doing, how they’ll be doing it, and why it’s important to the success of your business. Why is induction important? Offering a comprehensive induction program is one of the best ways to set your new team member up for success. The benefits include: ✔ Improved performance: An induction program helps a new employee understand their role and outlays exactly what is expected of them. As a result, they are able to make an immediate contribution. ✔ Ensure a cultural fit: A good induction will explain the ethos of the business and help a new employee acclimatise to your company culture. ✔ Higher employee engagement: An effective induction program helps employees feel engaged with the company. This can happen before the employee starts work (for example, sending information about the company a few days before employment begins). ✔ Get to know each other: The induction process is ‘two-way’. It allows the new employee to learn about the business and company culture, while offering the employer a chance to get to know the new recruit’s goals and ambitions. ✔ Build trust: The right induction can help a new starter feel valued by their new employer. In order to build trust, it’s vital to get the relationship off to a good start. ✔ Higher staff retention: The induction process can set the tone for the employee’s entire journey with your company. Staff who are given a good first impression are likely to stay with you for longer, reducing employee turnover and enhancing the employee lifecycle. What should an induction program include? What goes into your induction will depend on your business, industry, and the specifics of the new employee’s role. However, most induction programs will be built around four key phases: Pre-induction: This is when you get the new employee up to speed before they arrive for their first day. You don’t want to overwhelm new starters, so this part of the process normally covers high-level information. You might direct them to certain pages on the company website, send them the employee handbook and company policies, or information about the company structure and any major operations involved. This is also the perfect time to collect all their important HR documents. Induction: When the new employee comes in for their first day of work, the initial induction period begins. This might start with formal induction events or even an induction day (if you have several new employees starting in the same week), it can help them to settle if they perform the induction as a group. You should give new employees a tour of the workplace, introduce them to their new team members, and answer any questions they might have. The employee should then spend time with their line manager and get to grips with the new role. Post-induction: This phase is all about helping the new employee adjust to their role once employment has started. It can take a new employee several months to fully grasp their role. Post-induction is intended to set them up long-term. It involves gradually introducing the day-to-day processes of their role and giving them any staff training for the technical skills they need to be self-sufficient. Follow up: This is your opportunity to get feedback from the new employee about your induction program. Is there room for improvement? This is also a good time to tick off all the items on the employee induction checklist, making sure nothing crucial has been overlooked. Employee induction checklist When it comes to inducting new employees, a range of key information needs to be properly explained. It’s a lot to cover, so having an employee induction checklist can be helpful for both you and your new staff. Here’s a list of topics and activities to tick off: About the business Company history – What’s the company’s history and the story behind your business? Vision and purpose – What’s your business’s ‘why’? Company culture – How do your business’s values shape the employment experience? Current high-level goals – What are the business’s aims and how will it achieve them? Directors and key senior employees – Who are the business’s leaders? Organisational orientation – What are the company’s systems, hierarchies and major operations?  Working environment and facilities Car parking Kitchen facilities Bathrooms and if availabe lockers, showers and changerooms IT set up (laptops, PCs and other devices) Important software induction Web access and cyber security policy Email and phone use policy Health and safety guidelines Specific job hazards Location of fire exits Day start and end times Lunch and other breaks Dress code Flexible working policy Job-specific information Job title Job description Key responsibilities Contribution of the role to the business Introduction to line manager Introduction to their key team members and collaborators Information about key contacts Details about the probation period (if applicable) Performance review process Expected hours and work days Wages and pay Payroll processes Leave entitlements and policy HR documents and information Signed employment contract Signed employment agreement Sharing the employee handbook Bank account details Superannuation/KiwiSaver account details Driver’s licence, passport, and visa (if applicable) Emergency contact details Benefits Expenses Salary reviews Online induction for remote workers When it comes to new starters who are working remotely, out of sight doesn’t mean out of mind. Make sure you take remote new starters through a formal induction. You can use the following checklist, adapting it where necessary for their location: Online access to any formal company induction days or events. Video call meet and greet with key employees, such as directors, managers and team members. A video tour of the building so they can get a feel of the way you work. A meet and greet call with key supports, such as IT and HR. Details of your remote working policy and expectations. A remote workplace health and safety induction. Online meeting and remote working etiquette. Introduction to collaborative software. As an employer, you have a range of responsibilities when onboarding new employees. To get all your questions answered, contact Peninsula’s Advice Line on 0800215032. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Guide

Employment Leave Act Passed. What are the Changes You Need to Know?

Changes to employee leave marks a significant reform milestone of New Zealand's employment legislation. Created to replace the current Holidays Act 2003, the framework of the Employment Leve Act has been designed to make annual leave more transparent and easier for business owners and employees to understand. While this is a major change to how you as a business owner will need to calculate and manage leave entitlements, you don’t need to take any immediate action. The New Zealand Government has built in a 24-month transition period, starting on 7 August 2026, before the new leave system is fully in effect. This provides you with the necessary time to update business systems, employee forms and contacts, and discuss the changes with your team to ensure a smooth transfer. What is changing? The new legislation simplifies leave calculations and improves clarity for business owners and employees. Current system: All employees are entitled to four weeks’ annual leave after twelve months’ continuous employment. New system: Employees start accruing annual leave from their first day of employment. This is calculated at a rate of no-less than 0.0769 hours per standard hour worked. This equates to four weeks’ leave for employees who's standard 38 hour week does not change during a year. Annual and sick leave will also accrue in hours rather than weeks or days. This is based on an employee's standard hours of work. Sick leave accrues at 0.0385 hours per standard hour worked. Annual, sick, bereavement, and family violence leave become available from the first day of employment. A single hourly rate will be used to calculate all leave payments. A new 12.5% Leave Compensation Payment will apply to additional and casual hours worked, instead of accruing annual and sick leave based on those hours. Payslips will be mandatory and will need to include more details about leave and pay information, making entitlements easier to understand. Employees will be able to cash up to 25% of their annual leave balance each year. A new "Otherwise Working Day" test will determine leave entitlements for employees with irregular work patterns. The penalty relating to annual leave payments for employees returning from parental leave will be removed. To help you with the transition of calculating leave, the Act includes detailed formulas so you can convert existing employee leave balances from weeks and days into hours. When the new Act officially comes into force in August 2028, the converted leave will be paid as if it were leave accrued under the new Act. Transitioning to the new legislation The 24-month implementation period: There will be a 24-month implementation period between when the Act received Royal assent and when it comes into force on 6 August 2028. This provides time for payroll providers and employers to make necessary changes to business systems. Until the Holidays Act 2003 is repealed and the new Act comes into force in 2028, all existing rules still apply. This means you still must comply with the current Holidays Act and ensure you’re providing your employees with the correct entitlements and payments. Three years to update your employment agreements After the Act officially comes into force on 6 August 2028, there will be an additional year for employers and employees to agree to contract terms consistent with the new legislation framework (for example, by providing a compliant accrual rate for annual leave). In that year, if terms have not been updated, employers must comply with any provisions in the employment agreement more favourable than those in the Act. If employment agreements are not updated one year after the Act comes into force, new minimum statutory terms override any conflicting provisions in employment agreements. This provides you and your employees with an opportunity to proactively negotiate employment agreements. Casual employees Current system: Employers and workers can agree to pay 8% of gross earnings each pay period instead of paid annual leave if work is intermittent or irregular, but use of “Pay as you go” is not required. For sick leave, many casual workers do, technically, become entitled to sick leave – although they are unlikely to benefit from this entitlement in practice due to impracticality and compliance issues. New system: As in the case of additional hours, a leave compensation payment (LCP) (set at a rate of 12.5% of a worker’s ordinary hourly rate) will be paid for each ‘casual’ hour of work in every pay period, instead of that work accruing annual and sick leave. What does this mean for employers? At this stage, the most important message is: Business as usual continues for now. Current Holidays Act requirements remain in place until the new legislation comes into force 6 August 2028. This two-year lead-in period to allow for payroll and system changes. A year will be available after 6 August 2028 to update employment agreements where necessary. What should you do next? Before making any changes to your current business operations, as an employer it’s recommended you: Continue complying with the current Holidays Act 2003 requirements and obligations. Stay up to date with new information as it becomes available from the MBIE. Consider how the new hours-based accrual leave system could affect your workforce and payroll processes. Peninsula is here to help This reform represents one of the most significant changes to leave legislation in decades. However, the transition timeframe has been intentionally designed to give your business and employees time to understand the changes, update systems, and implement any necessary adjustments without causing disruption to your business operations. Peninsula will continue to provide practical guidance as further information becomes available. Need help understanding New Zealand’s Employment Leave Act? Peninsula can help. Our team provides 24/7 advice for your business and industry. Call us on 0800 215 024. Please Note: This article is general information only. The contents of this article does not constitute legal advice and is not intended to be a substitute for legal or other professional advice and should not be relied upon as such. Your specific circumstances after publication may affect the completeness or accuracy of this information. To the maximum extent permitted by law, we disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, currency and reliability of the information on this website, and to seek professional advice where necessary. Nothing contained on this website is to be interpreted as a recommendation to use any product, process or formulation. For clarity, Peninsula does not recommend any material, products or services of any third parties.

Guide

Shift Work and On-Call Allowance

For many New Zealand businesses, the lights never go out. From bustling hospitals and emergency services to late-night convenience stores and early-bird bakeries, shift work forms the backbone of countless industries. But keeping your doors open 24/7 comes with unique challenges, particularly regarding fair compensation and legal compliance for shift workers and those employees on-call.  This guide unpacks the complexities of shift work in New Zealand, equipping you with the knowledge to confidently navigate on-call allowances, shift penalties, and legal requirements.   What is shift work?  In New Zealand, shift work is usually characterised by variable working hours outside standard business hours (e.g., 9 am-5 pm). It often involves rotating rosters, nights, weekends or public holidays.   Examples of shift work Many New Zealand businesses rely on shift workers to keep things running seamlessly 24 hours a day, seven days a week. Shifts may be arranged in a number of ways, including:   Early morning shift: Starting before 7:00am.  Late night: Finishing after 10:00pm.  Night shift: Working primarily through the night (e.g., 10:00pm - 6:00am).  Rotating roster: Cycles through different start and finish times.  Weekend shift: Working Saturdays and Sundays.  On-call: Available outside scheduled shifts for emergencies or short-notice tasks.  These schedules may be fixed (the employee is expected to work the same schedule each week) or variable (the employee is expected to work a rotating schedule of different shifts at different times of the day). They may also be required to be available to work on request at any time of day (on-call).  The nature of the schedule – and what an agreement or contract deems as standard hours – may affect the type of penalties an employee receives.   What are shift workers?  According to the Holidays Act 2003, a ‘shift worker’ is defined as, ‘an employee who is employed to work regularly at different times on different days.’ This definition focuses on the variable nature of a shift worker's schedule compared to standard business hours.   Shift workers come from diverse professions, including:  Healthcare professionals: Nurses, doctors, and hospital staff.  Emergency services: Police officers, firefighters, and ambulance personnel.  Retail workers: Supermarket staff, convenience store employees and petrol station attendants.  Transport workers: Bus drivers, taxi drivers and airline staff.  Hospitality staff: Chefs, bartenders, and hotel receptionists.  Manufacturing and production workers: Factory workers and assembly line operators.  What are shift penal rates?  In New Zealand, penal rates are considered a form overtime pay. These rates are higher than employees’ ordinary hourly rates and are designed to compensate them for the disruption and inconvenience of working outside standard business hours.  Are employers required to pay shift penal rates in New Zealand?   While not required by law (except for public holiday penal rates), shift penal rates are commonly included in employment contracts and negotiated between unions and employers in collective agreements.  Night shift rates   Night shift work can be physically and mentally demanding due to disrupted sleep patterns and circadian rhythms. To compensate for these challenges, New Zealand businesses may pay higher night shift allowance rates. In some industries, this is mandated in collective agreements. The night shift penal rate an employer pays depends on the employment agreement in place.   On-call rates  Being on-call means being available to work outside your scheduled hours for emergencies or short-notice tasks. While not actively working, you're essentially ‘on standby,’ ready to respond when needed. On-call allowances compensate for this disruption and potential loss of personal time.   In New Zealand, employers must pay ‘reasonable compensation’ to employees for being on-call. Many industries have collective agreements in place to ensure employees are paid fairly and transparently for the time they are on-call, including sleepover wages, as well as any work they do if they are called out.   If you call an employee out to work, legally, you must pay them at least the hourly minimum wage. Some employers will pay the usual hourly wage, while others will pay extra.   When calculating a fair on-call rate for your employees, consider:   How many hours you expect the employee to be available (the longer the period, the higher the rate should be).  How this varies from their usual working hours.  Their usual hourly rate, wage, or salary.  How being on-call could restrict their activities.  Be clear about how an employee will be compensated for being on-call, which could be a flat fee for a set period of time, plus an hourly rate for call-outs (plus any applicable penal rates for public holidays, nights or weekends). You could also consider allowances like a paid day off in return for being on-call.   Shift penal rates vs. standard penal rates in New Zealand While the term ‘penal rate’ carries the same basic meaning in both scenarios — additional compensation for inconvenient work hours — there are key distinctions between shift penal rates and standard penal rates in New Zealand. Let's break it down.   Standard penal rates  Apply to specific days and times outside of standard business hours (e.g., weekends, public holidays, and nights).  Aim to compensate for the disruption to personal life and social activities associated with working these non-standard times.  Shift penal rates  Apply specifically to employees who work shifts as part of their regular work pattern.  Account for the disruption to sleep patterns and social life inherent with shift work.  Are often higher than standard penal rates due to the repetitive and ongoing nature of shift work.  Examples of where shift penal rates apply in New Zealand  Here are some real-life examples of situations where shift penal rates might apply:  1. Hospital nurse  A nurse works a regular night shift rotation from 10pm to 6am. In addition to their standard hourly rate, shift workers will receive a higher night shift allowance, which is typically more than the standard 10-20% night shift allowance due to the ongoing nature of their shift work.  2. Retail assistant  A supermarket employee works a rotating roster that includes weekend shifts (e.g., Friday nights and Sundays). They may receive the standard weekend penal rate (time and a half) for their weekend shifts, but their employment agreement might also include an additional weekend penalty rate for shift workers to acknowledge the disruption to their regular schedule.  3. Ambulance driver  An ambulance driver has an on-call roster, meaning they must be available outside their scheduled shifts to respond to emergencies. They'll receive the standard on-call allowance for being available, but their agreement might specify a higher on-call allowance for shift workers, considering the ongoing pressure and potential sleep disruption associated with their role.  4. Factory worker  A factory worker is part of a team that operates 24/7 production lines, requiring shift rotations. They'll likely receive night shift allowances and potentially an early morning allowance for shift workers if their shifts start before standard business hours.  Workplace health and safety for shift workers in New Zealand  Shift work presents unique health and safety challenges for employees due to disrupted sleep patterns and increased fatigue. As an employer in New Zealand, you have a legal and ethical responsibility to ensure the well-being of your shift workers, and this requires proactive measures beyond just fair financial compensation.  Regulations and responsibilities  The Health and Safety at Work Act 2015 (HSWA) establishes the fundamental duty of employers to ensure, as far as reasonably practicable, the health and safety of their workers, including those engaged in shift work. WorkSafe New Zealand is the government agency providing guidance and resources for managing workplace health and safety risks, including specific recommendations for shift work.  Key health and safety risks Fatigue: The most significant risk associated with shift work, leading to increased injury incidents, reduced productivity, and health issues like cardiovascular disease and diabetes.  Mental health: Disrupted sleep and social isolation, especially for lone workers, can contribute to anxiety, depression, and other mental health challenges. Musculoskeletal disorders: Awkward postures, repetitive movements, and heavy lifting during non-standard hours can exacerbate musculoskeletal issues.  Employer responsibilities These are some of the things you can do to ensure the safety and well-being of your shift workers. Our Health & Safety Checklist is a great place to start.   Conduct risk assessment: Identify potential health and safety risks specific to your shift work operations and the tasks involved.  Implement a fatigue management plan: This plan should outline strategies to minimise fatigue risks, such as rostering practices, fatigue awareness training and adequate rest breaks.  Promote healthy work practices: Encourage proper hydration, healthy eating habits, and access to natural light during shifts.  Provide support and resources: Offer confidential counselling services and access to health professionals trained in shift work challenges.  Regular consultation and communication: Actively engage with shift workers and their representatives to understand their concerns and tailor solutions accordingly.  Get expert advice on shift work and on-call allowances Shift workers are an integral part of many New Zealand businesses. Establishing the right pay and conditions for your people ensures you comply with legal requirements and sets your business up for long-term success. Understanding shift rates, overtime and on-call rates can be confusing, but it doesn’t have to be. Our team of HR and WHS experts are here to help you. Get in touch to discuss your needs today.   This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Guide

The Benefits of Employee Induction

When you're a business owner with multiple employees, having an effective induction program can help new employees quickly find their feet in your business. Helping them to immediately hit the ground running and have a positive impact. For the first few weeks, a new employee’s job, work environment and colleagues are all dauntingly unfamiliar. Simultaneously, there’s always lots to learn about the business and the responsibilities of their new role. For many new recruits, the whole onboarding process can be overwhelming. Creating a tailored induction program can help the latest addition to your team feel more comfortable in their new surroundings. It allows them to develop a better understanding of your company culture, the processes of the business, and fully grasp the expectations that come with their new role. What is induction? Employee induction is the process by which new employees are introduced to their new role and your organisation. It’s a crucial component of the onboarding process and gives a new staff member the chance to learn about the company’s values and culture. The new employee will often have a number of uncertainties, and induction is the point at which the details of their role are made clear. By the end of the induction process, the new recruit should know exactly what they’ll be doing, how they’ll be doing it, and why it’s important to the success of your business. Why is induction important? Offering a comprehensive induction program is one of the best ways to set your new team member up for success. The benefits include: ✔ Improved performance: An induction program helps a new employee understand their role and outlays exactly what is expected of them. As a result, they are able to make an immediate contribution. ✔ Ensure a cultural fit: A good induction will explain the ethos of the business and help a new employee acclimatise to your company culture. ✔ Higher employee engagement: An effective induction program helps employees feel engaged with the company. This can happen before the employee starts work (for example, sending information about the company a few days before employment begins). ✔ Get to know each other: The induction process is ‘two-way’. It allows the new employee to learn about the business and company culture, while offering the employer a chance to get to know the new recruit’s goals and ambitions. ✔ Build trust: The right induction can help a new starter feel valued by their new employer. In order to build trust, it’s vital to get the relationship off to a good start. ✔ Higher staff retention: The induction process can set the tone for the employee’s entire journey with your company. Staff who are given a good first impression are likely to stay with you for longer, reducing employee turnover and enhancing the employee lifecycle. What should an induction program include? What goes into your induction will depend on your business, industry, and the specifics of the new employee’s role. However, most induction programs will be built around four key phases: Pre-induction: This is when you get the new employee up to speed before they arrive for their first day. You don’t want to overwhelm new starters, so this part of the process normally covers high-level information. You might direct them to certain pages on the company website, send them the employee handbook and company policies, or information about the company structure and any major operations involved. This is also the perfect time to collect all their important HR documents. Induction: When the new employee comes in for their first day of work, the initial induction period begins. This might start with formal induction events or even an induction day (if you have several new employees starting in the same week), it can help them to settle if they perform the induction as a group. You should give new employees a tour of the workplace, introduce them to their new team members, and answer any questions they might have. The employee should then spend time with their line manager and get to grips with the new role. Post-induction: This phase is all about helping the new employee adjust to their role once employment has started. It can take a new employee several months to fully grasp their role. Post-induction is intended to set them up long-term. It involves gradually introducing the day-to-day processes of their role and giving them any staff training for the technical skills they need to be self-sufficient. Follow up: This is your opportunity to get feedback from the new employee about your induction program. Is there room for improvement? This is also a good time to tick off all the items on the employee induction checklist, making sure nothing crucial has been overlooked. Employee induction checklist When it comes to inducting new employees, a range of key information needs to be properly explained. It’s a lot to cover, so having an employee induction checklist can be helpful for both you and your new staff. Here’s a list of topics and activities to tick off: About the business Company history – What’s the company’s history and the story behind your business? Vision and purpose – What’s your business’s ‘why’? Company culture – How do your business’s values shape the employment experience? Current high-level goals – What are the business’s aims and how will it achieve them? Directors and key senior employees – Who are the business’s leaders? Organisational orientation – What are the company’s systems, hierarchies and major operations?  Working environment and facilities Car parking Kitchen facilities Bathrooms and if availabe lockers, showers and changerooms IT set up (laptops, PCs and other devices) Important software induction Web access and cyber security policy Email and phone use policy Health and safety guidelines Specific job hazards Location of fire exits Day start and end times Lunch and other breaks Dress code Flexible working policy Job-specific information Job title Job description Key responsibilities Contribution of the role to the business Introduction to line manager Introduction to their key team members and collaborators Information about key contacts Details about the probation period (if applicable) Performance review process Expected hours and work days Wages and pay Payroll processes Leave entitlements and policy HR documents and information Signed employment contract Signed employment agreement Sharing the employee handbook Bank account details Superannuation/KiwiSaver account details Driver’s licence, passport, and visa (if applicable) Emergency contact details Benefits Expenses Salary reviews Online induction for remote workers When it comes to new starters who are working remotely, out of sight doesn’t mean out of mind. Make sure you take remote new starters through a formal induction. You can use the following checklist, adapting it where necessary for their location: Online access to any formal company induction days or events. Video call meet and greet with key employees, such as directors, managers and team members. A video tour of the building so they can get a feel of the way you work. A meet and greet call with key supports, such as IT and HR. Details of your remote working policy and expectations. A remote workplace health and safety induction. Online meeting and remote working etiquette. Introduction to collaborative software. As an employer, you have a range of responsibilities when onboarding new employees. To get all your questions answered, contact Peninsula’s Advice Line on 0800215032. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.