Every employee has minimum legal entitlements. The right to annual holidays, to be paid the minimum wage and the like.
It doesn’t matter if these entitlements are not mentioned in their employment agreement. Their right to these benefits stems from various statutes. They are not a contractual matter.
That means you can’t even agree with your staff that you won’t provide these benefits. You must provide them no matter what.
Still, these entitlements rely on you as the employer giving them. You are the one who has to pay the minimum wage, or ensure the employee gets their annual holidays. So what if you fail to give your staff those things?
Till recently, a penalty was the worst possible consequence of failing to give these entitlements to your staff. Now the Government has introduced tougher measures for employers who don’t meet these standards.
The most serious of these is that you can be banned from employing staff.
WHAT ARE THE MINIMUM STANDARDS?
Its actually quite simple to avoid penalties or banning orders. You just have to meet minimum standards for employing staff. So what are they?
The minimum standards are a collection of laws dealing with basic employment rights. They include:
- Retaining a copy of the employee’s signed employment agreement;
- Providing facilities and breaks for employees who want to breastfeed their children at work;
- Providing adequate rest and meal breaks for employees;
- Keeping a wages and time record for every employee;
- Not treating employees differently on the basis of their sex;
- Giving employees annual and public holidays and sick and bereavement leave;
- Keeping a record of holidays and leave for every employee;
- Paying staff at least the minimum wage for every hour worked; and
- Not deducting money from an employee’s pay without their consent.
If you employ staff, you should at least get up to speed with each of these standards. They are the minimum expectations of you. You need to be clear about what each standard requires.
WHAT HAPPENS IF YOU BREACH THEM?
In many cases breaches of minimum standards can go unnoticed. Employers are not aware of them, or employees or are not alert either. Or if they are aware, they may fear raising the issue.
If you breach the minimum standards it may be reported to the Ministry of Business, Innovation and Employment (MBIE).
A Labour Inspector from MBIE can investigate the matter. They can ask you to produce records and comment on their initial findings.
If they find you breached minimum standards they can do any of the following:
- Agree with you that you will do something by a certain date to meet the minimum standards, on threat of a penalty;
- Issue you with a notice to improve your conduct to meet the minimum standards;
- Issue you with a demand notice to pay your employees in accord with the minimum standards;
- Require you to pay an infringement fee of up to $1,000 for not keeping a signed copy of your employees’ employment agreements, or for not keeping wage, time and holiday records;
- Sue you in the Employment Relations Authority on behalf of employees whom you have not paid in accord with the minimum standards.
HOW TO GET A BANNING ORDER
The right to seek a banning order is yet another tool in the Labour Inspector’s arsenal. This order can be sought from the Employment Court by a Labour Inspector if:
- you commit serious breaches of certain minimum standards (such as failure to pay annual holidays or the minimum wage); or
- you breach any of the minimum standards persistently.
If the court makes a banning order, you can be stopped from doing one or more of the following things for up to 10 years:
- entering into an employment agreement as an employer;
- being an officer (eg, a director or CEO) of an employer; or
- being involved in hiring or firing employees.
Clearly any of those restrictions will make it nigh impossible to run a business that requires staff.
The banning order is publicly notified in the New Zealand Gazette. It is also likely shared with other Government departments. So it will be difficult to avoid its reach.
If you breach a banning order, then you can really get into trouble. You might be fined up to $200,000 or face up to three years in prison.
You don’t want to be on the end of a banning order. It could make it really difficult to get new staff and continue to run your business efficiently.
More than ever then, its important to be aware of what the minimum standards are and how to apply them to your business.
Do you fully understand the minimum standards?