Payroll legislation and recent case law Kylie Dunn, Senior Solicitor, Russell McVeagh

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Payroll legislation and recent case lawKylie
Dunn, Senior Solicitor, Russell McVeagh
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Overview

1. Wages Protection Act 1983
2. Minimum Wage Act 1983
3. Holidays Act 2003

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Wages Protection Act 1983Key provisions
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Wages Protection Act

• Fundamental rule
• Employers shall, when any wages become payable to
  a worker, pay the entire amount of a worker's
  wages without deduction
• Employers claiming a right to set off claims
  against the worker from wages owing have been
  uniformly unsuccessful (Amaltal Fishing Co Ltd v
  Morunga)

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Wages Protection Act

• Exceptions
• an employer may make deductions from wages with
  the written consent or request of the employee,
  provided the purpose of the deduction is lawful.

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Wages Protection Act

• In certain circumstances, an employer may recover
  overpayments of wages directly from the
  employee's wages, provided
• not reasonably practicable to avoid making the
  overpayment
• employee given notice of the intention to recover
  it
• overpayment is recovered not later than 2 months
  after the notice

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Minimum Wage Act 1983Key provisions
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Minimum Wage Act

• Every worker entitled to receive payment for work
  at not less than the minimum wage
• 'Minimum Wage' vs 'New Entrants Minimum Wage'
• Minimum wage exemption permit available if
• Worker significantly and demonstrably limited by
  a disability
• Any reasonable accommodations that could have
  been made have been considered
• Reasonable and appropriate to grant the permit

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Holidays Act 2003Key Provisions
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Holidays Act

• Key part of payroll
• Issues arise
• During employment
• On termination of employment
• Developing area of the law

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Holidays Act

• Annual leave
• Greater of 'average weekly earnings' and
  'ordinary weekly pay'
• Public holidays, alternative holidays, sick
  leave, bereavement leave
• Relevant daily pay

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Annual leave

• Payment is on the basis of the greater of
• "ordinary weekly pay"
• "average weekly earnings"

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Annual leave

• Ordinary weekly pay - the amount received by the
  employee for an ordinary working week at the time
  the leave is taken
• Average weekly earnings - 1/52 of an employee's
  gross earnings, being all payments the employer
  is obliged to pay an employee under their
  employment agreement

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Annual leave

• Are you calculating holiday pay correctly?
• Watson v Microsoft New Zealand Limited
• Microsoft excluded bonus payments from holiday
  pay
• Employment agreement entitled Watson to
  participate in incentive plan.
• No discretion regarding payment, but discretion
  to amend or alter the plan.

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Annual leave

• Authority held
• A discretion to alter an incentive plan not
  sufficient to make payments under the plan
  discretionary
• Employer had to retain a specific discretion
  regarding payment of the incentive
• Incentive should have been included in holiday
  pay

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Public holidays

• Different to annual leave
• Can an employee be required to work on a public
  holiday?
• Payment on public holidays - relevant daily pay
• Transfer of a public holiday

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Public holidays

• When can an employee be required to work on a
  public holiday?
• Must be in the employment agreement
• Must be an ordinary working day

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Public holidays - payment

• Q 1 Can the employee be required to work on the
  public holiday?
• Q 2 Does the employee actually work on the
  public holiday?

Q 1 - No Q1 - Yes
Q2 - Yes Paid time and a half for the hours actually worked (can only request employee to work) Paid time and a half for the hours actually worked and an alternative holiday.
Q2 - No No pay Paid relevant daily pay
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Public holidays - payment

• Paid on the basis of relevant daily pay
• What the employee would have received had they
  worked on the day
• Includes productivity, incentive, commission and
  overtime payments if those payments would have
  been received on the day

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Public holidays - payment

• Formula if relevant daily pay cannot be
  determined.
• Gross earnings
• __________________________________________________
  _______________________________________
• Number of days to earn that amount

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Public holidays - transfer

• An employer and employee may agree to observe a
  public holiday on a different day (s44(2))
• day is not confined to a 12am to 12am period
• a specific day must be identified
• What does this mean?

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Public holidays - transfer

• New Zealand Airline Pilots' Association
  Industrial Union of Workers Incorporated v Air
  New Zealand Limited (Supreme Court)
• an employer and an employee cannot agree to
  transfer a public holiday from a day listed in
  the Act to another day
• Really about agreement regarding an alternative
  holiday
• Decision makes s44(2) redundant

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Public holidays - transfer

• Holidays (Transfer of Public Holidays) Amendment
  Bill
• Introduced 9 April 2008
• Narrow focus
• Ensures when a shift spans 2 days, at least 1 of
  which is a public holiday, an agreement can be
  reached for the public holiday to be transferred
  to cover 1 whole shift

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Alternative holidays

• May only be paid out on termination of employment
  or if
• The employee requests it and
• More than 12 months has passed since the
  alternative holiday was accrued
• Payment at a rate agreed

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Kylie Dunn, Russell McVeagh09 367
8136kylie.dunn_at_russellmcveagh.com