As we close out 2022, employers face pressure of labour shortages, high inflation and increased employee expectations (including of pay and conditions, culture and wellbeing measures).
Significant workplace law changes are on the horizon as we head into 2023. Key issues for employers are:
Immigration changes – Median wage continues to rise
This year, Government implemented an accreditation system for employers seeking to employ migrant employees. It has also recently announced that the median wage ($27.76) is going to increase to $29.66 in February 2023.
While migrant workers are in short supply across most industries, positively Immigration New Zealand processing times are remarkably speedy at present, providing some relief.
Fair Pay Agreements
The new law on fair pay agreements has been passed into law, with the new bargaining system commencing 1 December 2022.
Fair pay agreements will establish an “award” system similar to Australia’s ‘modern awards’, setting minimum terms and conditions for workers across an industry or occupation.
Employers in affected industries/occupations should ensure they are informed of and have their voices heard in bargaining, and ensure minimum terms are met. The challenge will be how to stand out when universal standards apply.
Employee or Contractor?
Scrutiny of independent contractor arrangements will continue, following several Employment Court decisions recently, the latest of which involved Uber drivers. In that case contractor drivers successfully argued they were employees. Other affected industries for scrutiny include construction and couriers, which have primarily operated using contractors until now.
Additionally, the Tripartite Working Group of New Zealand continues to make recommendations to Government, urging it to provide more clarity around the definition of ‘employee’, on the back of recent employee classification disputes.
Health and Safety – WorkSafe’s focus
Recently we have seen WorkSafe’s prosecution approach shift, including by focusing on small business owners and expanding the reach of health and safety obligations to previously unlikely parties. Common themes among officer prosecutions illustrate:
- Inadequate training of workers, including on how to mitigate or eliminate hazards and risks;
- Lack of knowledge of and departure from industry standards;
- Failure to learn from previous health and safety incidents; and
- Failure to identify hazards and implement controls adequately.
Given the expanding interest and reach of WorkSafe, it is increasingly important that employers/officers are aware of and compliant with health and safety obligations.
The issue of wellbeing in the workplace, and expectation that employers will manage psychosocial risks in the same way as other hazards is also high on the agenda, with WorkSafe releasing new resources to support businesses here.
To address these issues, we recommend:
Checking workplace policies and documentation are fit for purpose. If the way you work has changed, do these reflect your “new normal”? For example, if you have employees regularly working from home, have you completed a health and safety risk assessment of their home workplace? Do your policies clearly set out expectations when working from home?
Ensuring mental health and wellbeing are proactively supported and managed, including through policy and wellbeing measures.
Making workplace culture a top priority. This is essential to support retention and recruitment of staff.
Consider what makes you an employer of choice, how you communicate this to the market, as well as how to secure your MVPs to keep them committed to you. Keeping this focus is almost always more effective (and often cheaper) than having to counter a potential new employer’s offer.
Review contracting arrangements, to make sure these are fit for purpose. If not, consider alternatives and any associated transition strategy.
If you will hire migrant workers, get ready by securing accreditation early. This is essential to a smooth path, securing migrant candidates at offer stage.
Other law changes
There are also possible law changes coming around:
- restraint of trades, with a Bill progressing through the legislative process to prohibit use of these except for senior employees;
- sexual harassment claims, with a Bill progressing too on extension of the timeframe for raising these; and
- income insurance protection for employees who are exited due to redundancy or medical incapacity, which is not yet at Bill stage but under consideration by Government, which would add to the cost of employment in that it would operate as a levy dependent on earnings, similar to the ACC scheme.
Clear workplace strategy key
Being prepared with a clear workplace strategy, with the right advice and documentation to support this, is essential to ensuring your workplace can compete in the current market and amidst the headwinds that business faces.