New Employment Legislation on the horizon

By Hannah-Jean McCarty

6 March 2023

There are numerous legislative changes on the horizon and employers are in for a busy year adjusting to new employment law developments.

Minimum Wage Increase

The minimum wage increase to $22.70 will come into effect from 1 April 2023. The increase is in line with recent increases in inflation and the current cost of living crisis. The starting out and training minimum wage will increase to $18.16. The effect on employees is significant, with the MBIE stating around 222,900 people are paid between $21.20 and $22.70.

There are concerns as to the effect on small businesses, with the 7% wage increase on previous increases which may introduce greater wage costs to the business.

Despite no legal requirement to provide a pay rise to those on $22.70, this minimum wage increase may give rise to pay inconsistencies for more experienced employees. If not already in the pipeline, it is a good time to create a strategy for managing pay relativity.

Holiday Act Changes

Although unclear when, changes to the Holiday Act are coming, The changes will introduce more transparency and clarity in determining aspects such as leave.

Annual Leave Payments (ALP) have previously been calculated at ordinary weekly pay or the average weekly earnings over the previous twelve months. A new calculation has been added that the ALP can also be paid at the weekly earnings over the last 13 weeks. Likely to have the most effect on commission based employment, as their earnings fluctuate and thus are more likely to be affected by this new calculation.

Timeframes on leave entitlement are soon to be changed. Employees will be entitled to sick leave on their first day of employment instead of waiting 6 months. Similarly, leave entitlement will change to pro rate basis, meaning an employee will be entitled to 2 weeks leave after 6 months of employment.

Parental leave will no longer affect ALP when an employee returns to work. Previously, an employee who returned from parental leave received a reduced ALP for 12 months following their return to work. However, under the changes the returning employee will receive their full rate for annual leave.

The Employment Relations (Extended Time for Sexual Harassment) Amendment Bill

The proposed bill will extend the time a person has to raise a personal grievance (PG) involving sexual harassment from 90 days to 12 months, to acknowledge that victims of sexual harassment may require more than 90 days to feel comfortable making a complaint. The 90-day rule does not reflect the way sexual harassment occurs in practice, this extension will allow complex and difficult sexual harassment matters to be dealt with more effectively. Employers need to be aware of situations where a PG involves allegations of sexual harassment alongside other allegations. Furthermore, some have expressed disappointment that the bill does not include workplace bullying or discrimination.

If you require any further information or clarification about upcoming legislation and how they may affect your business contact Pitt & Moore’s employment team on 03 548 8349.

Disclaimer: The information contained in this publication is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.