Changes to the Employment Laws that are Going to Affect the NZ Employees

An increase in the minimum wage and bridging the pay inequity are significant recent employment reforms. Follow this article to find out more.

Several NZ employment reforms are set to come to auction in 2021. While some have already been implemented, some will come to force by the end of this year. These changes will improve working conditions for NZ employees and furnish more secure and healthy working relations between employer and employees.

In the article below, we will discuss some significant reforms in employment rights, ensuring that all NZ workers are treated fairly and justly. All these reforms apply to migrant workers from other countries as well and have been specially passed to safeguard their rights.

The major employment reforms are:

  • Increase in the minimum wage
  • Pay equity
  • Sick leave extension
  • Fair pay agreements
  • Dependent contractors

Increase in Minimum Wage for NZ Workers Since April 1, 2021

The increase in minimum wage was implemented on April 1, 2021, from NZD 18.90 per hour in 2020 to NZD 20.00 per hour for adult workers.

The minimum wage for starting out employees or trainees increased from NZD 15.12 per hour to NZD 16.00 per hour.

The NZ government and employment officials are following strict protocols to ensure that all employees in NZ receive at least the minimum wage.

In a recent event, an asparagus dealer in Canterbury was charged with a penalty of NZD 26000 and a reimbursement sum of NZD 54000 for paying less than the minimum wage to his employees and making unlawful deductions.

All New Zealand workers, both foreigners, and citizens are entitled to the minimum law. Whether workers receive payment in wages, salary, commission, or pay per piece, the employer must calculate the minimum salary according to the number of hours worked and pay the necessary sum.

Book a Consultation with our immensely experienced immigration and employment experts to know more about the minimum wage and how it has evolved over the years. They will provide you insightful tips on navigating your current employment situation. Thus, it will be a wise decision to reach out.

Reforms to Address Pay Gaps

Measures will be adopted to ensure that employees do not face inequal pay owing to discrimination.

Ample evidence shows that companies tend to solely hire male employees for work, cutting out opportunities for women notwithstanding their qualifications.

The other pressing issue is that female employee are paid less than their male counterparts for the same quality of work done over the same duration.

The Pay Equity Amendment Act 2020, which came into force in November 2020, sets out to correct these practices to ensure pay equity not just across gender but as well as ethnicity and age.

This imposes legal accountability on the employer and attempts to settle the historically prevailing problem of the pay gap while granting employment rights to the employee to lay claims and raise disputes.

The new workplace reform shows promising signs to eradicate payscale discrimination in the paper and practice.

Extension of the Sick Leave Period

The minimum sick leave entitlement legislation permits an employee to take a leave of 5 days on falling sick if they have worked with that same employer for at least six months. The Holidays Amendment Bill introduced on December 1, 2020, will increase the minimum sick leave entitlement to 10 days per year.

The current maximum entitlement leave remains unchanged, and any unused sick leave can be carried over up to 20 days annually.

Regardless of their working pattern (whether they work full-time or part-time) and whether they're migrant workers or New Zealanders, all employees are entitled to the sick leave extension period.

Fair Pay Agreements Will Strengthen Collective Bargaining

Fair Pay Agreements are a set of sector-specific minimum employment standards relating to wages, overtime, etc.

There are crucial provisions set forth to be incorporated in the Fair Pay Agreements this term, increasing the employment security manifold for employees.

These agreements are legislated to cover both employees and dependent contractors. This law gives workers the right to form unions where the unions represent workers during bargaining with the employer.

This will allow workers to place their demands collectively and ensure that they get the fair price for the service they deliver.

The Plight of Dependent Contractors will Be Addressed

The term "dependent contractor" refers to any worker who can operate their own business and use their means and equipment but still depend on the regulations of a company to earn a considerable part of their income. For example, workers in the gig economy like Uber drivers and courier delivery men.

Dependent contractors face multiple perils in their employment, the primary reason being that their position as an employee remains blurred. They can access a relative amount of freedom as opposed to other employees. For example, they can decide their work hours to a certain extent. But contractors workers still have to depend on a company to hire them from whom they extract income. This ultimately causes them to lose their employment rights.

In the forthcoming reforms, contractors will be given clear employment rights, including the right to bargain collectively and minimize how anyone can exercise control over them.


NZ employees should check with their employers to update the reforms in their bond agreements. Any violation of these workplace rights by employers can result in serious repercussions.

For example, a particular Tiger Scaffolding Company was severely penalized for making unlawful deductions from three employees. Moreover, the employer license of the company was scrapped indefinitely, causing a massive blow to the company.

Any violation of these reforms must be promptly reported to the Employment Relations Authority (ERA). Keep a lookout for employment reforms to ensure that you receive fair pay and just treatment in your workplace.

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