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Guide
Employers need to know if their new employee is the right fit for the business. Once the new employee starts working, an employer can gauge their skills and capabilities and ascertain if they are a good match for the role. From 23 December 2023, all New Zealand businesses became eligible to use a 90-day trial period provided they meet all other requirements. Before this, the 90-day trial period was only available to small business owners employing 19 employees or less. In this guide, we discuss the 90-day trial period, its impact on your business, benefits, and other key factors for employers to remember. What is the 90-day trial period? As the name suggests, the 90-day trial period for new hires is a defined period during which a new employee demonstrates if they are suitable for a new job. Valid trial periods that comply with the Employment Relations Act 2000, enables the company to dismiss the employee up to 90 days into the employment relationship and prohibits the employee from then raising a personal grievance for unjustified dismissal. Trial periods can apply to all new employees, except for employees on an Accredited Employer Work Visa. Trial periods cannot be used for current employees or employees who have worked for the employer previously. Why do you need a trial period? A trial period can be useful for both employers and employees by ensuring that the role and the company is appropriate for both parties. Despite their advantages, there are some important conditions and rights which employers need to comply with in order for the trial period to be valid. Importantly, an employee can be placed on an employment agreement for the first 90 calendar days of their employment. This must be outlined in the employment agreement before the employee starts work and certain criteria are met. Section 67A and 67B of the Employment Relations Act 2000 set out the legal requirements for 90-day trial periods. The factors required for a valid and legal trial period: It is written in the employment agreement by way of a 90-day trial period clause The 90-day trial period clause needs to stipulate when the 90-day trial commences It must be entered into willingly and in good faith. i.e. an employee cannot be forced into a trial period It removes the ability for an employee to bring a personal grievance for unjustified dismissal provided the employer has provided the correct amount of notice of termination as set out in the employment agreement. The employment agreement needs to be signed before commencing employment The employee must have not worked for the employer previously The employee must have a reasonable amount of time to seek advice and review the agreement prior to signing and starting employment. For those employees covered by a collective agreement the trial period must be in line with what is outlined in the agreement. For example, if the collective agreement states that they cannot be employed on a trial period, then the individually negotiated additional terms of the employee’s contract cannot contain a trial period provision. Employee rights and responsibilities during a trial period Employees on trial periods are entitled to all of the minimum entitlements of employment such as minimum wage, annual holidays, public holidays, sick leave, and health and safety conditions. Employees on a trial period cannot be subject to unlawful discrimination. A personal grievance can still be brought by an employee on a trial period for any other matter except their dismissal. For example, allegations of sexual harassment, pressure regarding union membership, or discrimination are some valid reasons for an employee on a trial period to raise a personal grievance. In addition, such employee can also raise a claim relating to breach of statutory entitlements such as the minimum wage or those entitlements contained in the Holidays Act. Common reasons for invalid trial periods There are some cases heard by the Employment Relations Authority, where employers were unable to rely on a 90-day trial period as a defence to an unjustified dismissal because the trial period was deemed invalid. Some cases were deemed invalid due to: The employee having worked for the employer previously The employee was informed about the 90-day trial period after they accepted an offer of employment. The employee was not given a written employment agreement The wording of an employment agreement does not comply with section 67A of the Employment Relations Act The employee was not advised they were entitled to seek independent advice about the agreement and was given a reasonable opportunity to do so for that to happen (in breach of the s63A of the Employment Relations Act) The employee did not sign the employment agreement, or did not sign the employment agreement until after starting work The employer gave notice after 90 days from the commencement of employment The employment agreement referred to a trial period in 3 months, not a specific number of days. Notice of dismissal was given at 3 months, which was converted to 91 days and therefore fell outside the 90-day statutory timeframe The employment agreement referred to a probationary period and not a trial period (they are not the same) Trial periods vs probationary periods Employers can use a trial or probationary period to assess that an employee is suitable for a position. However, there are differences between a trial and a probationary period: Length of time: A trial period cannot last longer than 90 days. Probationary periods do not have a fixed time limit so can be used for a longer assessment period if the employee and employer agree. Reason for dismissal: If an employee has been on a trial period, their employer does not have to give a reason before dismissing them. If an employee has been on a probationary period, their employer must give them a good reason for dismissal and a fair opportunity to resolve any problems first. Previous employment: An employee can only be on a trial period if it's their first time working for that employer. An employee can be on a probationary period if they are new to the organisation, or if they already work there and are trying out a new role. Notice of termination during a trial period The notice required for terminating an employee during a trial period must be specified in the employment agreement. However, the Employer may specify a shorter notice period during the trial period. Failing to give appropriate notice to an employee will mean the trial period is invalid. The notice for termination must also be given during the trial period. For example, if the notice period is one week and the trial period is six weeks, the employer must give notice prior to the end of the sixth week. While notice must be given within the 90-day trial period, the employee’s last day of employment may be outside the trial. For example, a 90-day trial is in place, and the employee is given notice of termination on the 88th day, with one week of notice (as provided for in the employment agreement), which takes the end of employment beyond 90-days. In terminating an employee on a trial period, the employer does not need to give reasons for their termination. Build fair workplaces with Peninsula Creating fair and safe workplaces is important and having established HR policies ensures that your employees feel protected and secure. We understand that small businesses do not have the resources and support to handle all things employment relations and workplace health and safety. That’s why we offer personalised HR management support, resources, and advice for small and medium sized businesses based on their specific needs and industry. Our team members work with you to create a plan and policy that works for your industry and niche. Our advice line is available for business owners and employers. Talk to Peninsula's team today for support with HR and compliance needs. 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
A payslip is a document that an employer gives to an employee at the end of each pay period. A payslip gives the employee a breakdown of important pay-related information, such as their total wages earned, as well as any income tax, overtime, holiday pay, bonuses, or commissions. Do employers have to give payslips? Employers are currently not legally required to provide payslips unless agreed upon in the employment contract. However, employers must keep accurate wage and time records as per the Employment Relations Act 2000 and Holidays Act 2003. Payslips give employees useful information and it’s currently considered best practice to issue all employees with payslips at the end of each pay period. As an employer, it’s vital to ensure all the information given in payslips is up to date and accurate, which can help to avoid any pay disputes with your employees. From 6 August 2028 the following will be in force as per the Employment Leave Act 2026: The Employment Leave Act 2026 requires employers to provide a pay statement (commonly referred to as a payslip) to employees for each pay period during which the employee worked or was on paid leave. What information should be in an employee’s payslip? There are several important pieces of information that every employee’s payslip should cover and which information will be compulsory from 6 April 2028. These include: The employee’s name and IRD number: Every payslip should begin by clearly stating the employee’s full name and their IRD number. This will help to ensure that the slip is issued to the correct person. Your business/organisation name. Your NZBN: Your New Zealand Business Number (NZBN) is a unique identifier that inland revenue uses to track your business for tax purposes. Pay period dates: The payslip should specify the start and end dates of the pay period that the employee is being paid for. Payment date: This is the date that the funds will be deposited into the employee’s bank account. Hours worked: If the employee’s pay is calculated based on an hourly rate, the payslip should show how many hours the employee has worked and the normal hourly pay rate. The amount paid to the employee in each pay period, itemised by category (such as ordinary rate, “pay-as-you go” payment, overtime rate, piece work rate, commission, or allowances) Gross earnings: This figure should reflect the employee’s total earnings for the pay period before any taxes or deductions. Net pay: This figure is the ‘take home’ amount the employee will be paid after taxes and deductions. Additional earnings: This covers any overtime pay, bonuses, commissions, or additional entitlements that can be singled out for the pay period. Taxes withheld: This is the amount of money that has been withheld from an employee’s pay as tax under PAYE. KiwiSaver contributions: This specifies the amount of money that has been paid into to the employee’s KiwiSaver, or any other payments into the employee’s chosen superannuation account. Any other deductions the employer is required or entitled to make from the employee's pay, with details of such deductions Leave balances: The following leave information for the pay period, as applicable: leave information for the pay period, as applicable: annual leave public holiday, alternative leave and sick leave and bereavement leave Payment on termination: The payslip must also include the final date of employment and any leave payments made upon termination (where applicable) The employer may include any other information they choose but must not include information indicating that an amount paid is for family violence leave or that a period of leave is for family violence leave purposes. How and when should payslips be given? Payslips can be issued on paper, electronically, or both. With most companies supporting sustainability, it’s common to supply them electronically via an email or through your company’s HR platform. Payslips contain sensitive information, so in the interests of maintaining data privacy it’s important to ensure paper copies of payslips and any financial data are securely stored throughout the payroll process. Most businesses will supply a payslip no more than one working day after the employee’s pay day, although some businesses may provide it earlier. How should employers create and format payslips? Rather than calculating payslips manually with Excel, there are a range of software solutions that allow you to easily automate the process. Payslip generators offer customisable templates, which the software’s AI then populates with information based on an employee’s unique payroll data. How do payslips help the payroll process? Creating payslips with all the critical information can help your payroll staff with record keeping, ensuring they have accurate and complete data for each pay cycle. Payslips also ensure that employees receive the correct pay and entitlements, helping you avoid unnecessary disputes with your employees. Do employees have a right to ask for payslip information? If your employees don’t get payslips, or their payslips don’t have enough information, they have a right to ask you to write down the things they want to know. In this case, you’re obligated to supply any records they request related to hours worked, wages, holiday, leave balances, taxes, commissions, and KiwiSaver payments. If there is anything about the information you supply that they don’t understand, you must explain it when an employee asks. The Employment Leave Act, which comes into force on 6 August 2028, makes it a legal requirement that employer provide their employees with pay statements for each pay period in which the employee has worked or was on paid leave. Struggling to understand wage and pay entitlements and obligations? Peninsula works with Kiwi businesses supporting them with tailored documents and resources. Call us on 0800 215 036 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
If you're a business owner with multiple employees, it is your responsibility to ensure all your employees have a legal entitlement to work in New Zealand. Employers caught hiring employees who are not New Zealand citizens, do not have a visa or are in breach of their visa, face serious penalties. To avoid being fined, employers need to make sure every prospective employee has a valid working visa with an entitlement to work, or, is a permanent resident before the hiring process can start. What is entitlement to work? New Zealand is a diverse country offering a range of work and lifestyle opportunities. To work in New Zealand legally, a prospective employee must meet certain requirements and provide the correct documentation to prove their current work status. Who is entitled to work in New Zealand? To prove eligibility to work in New Zealand legally, there are certain documents which will or will not be accepted. People who have an entitlement to work in New Zealand must hold an: Australian or New Zealand birth certificate Australian or New Zealand citizenship certificate Australian or New Zealand passport Evidence of citizenship certificate Valid working visa (make sure the visa allows them entitlement to work) These are the only documents to prove someone can work in New Zealand legally. Employers should always request certified copies of these documents. They should also have them approved by an authorised person, such as a Justice of the Peace (JP). What are unacceptable documents? Documents not accepted as proof of entitlement to work in New Zealand are: Driver’s license IRD number Bank account Referrals from employment agencies or past employers How to verify entitlement to work There are ways for employers to avoid serious penalties and only hire employees entitled to work in New Zealand. Before hiring a new employee, employers can perform a background check on their current work status, as long as there is consent. Employers should visit the Immigration New Zealand website and register to VisaView to see their current visa status, passport number, and other relevant working conditions. It’s free to register for VisaView and only takes a few minutes to perform the check. By performing an entitlement to work check, employers can find out if there are any restrictions on the type of work they can do, and if they are only allowed to work for certain employers. Seasonal Employees and Visa Verification In New Zealand, the horticulture and viticulture industries often do not have enough workers to keep up with seasonal demand. To make up for the labour shortage, the Recognised Seasonal Employer (RSE) scheme lets employers bring workers from certain overseas countries to New Zealand to plant, maintain, harvest and pack crops. Employers must meet the minimum requirements to be an eligible RSE such as: Paying the minimum adult wage. Providing reasonable rest breaks. Providing sick leave and holiday entitlements. To hire the same employee for another season employers need to request a new agreement which should be granted if they meet the conditions of their permit, and if there is still a shortage on local labour. Peninsula can help with entitlement to work checklists to protect employers when hiring new employees. For peace of mind, employers should call Peninsula on 0800 215 031. 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.