Ministry of Business Innovation and Employment (MBIE) inspectors are doing the rounds checking farmers' employment agreements, time and wage records for compliance with employment and minimum wage laws.
What does this mean for farmers, and how can employers make sure they're doing the right thing?
Paying a salary has become increasingly common in the agricultural sector, as it is relatively simple for the employer and it also provides for a consistent flow of income to the employee, which is useful for budgeting purposes.
However, employers must be vigilant in ensuring that employees on a salary (as well as those paid by the hour) receive no less than the minimum wage of $14.25 per hour, for actual hours they work. This means employers need to keep accurate time and wage records documenting the hours worked per week for all their staff.
Recent case law has also determined that seasonal averaging, or in some circumstances averaging over a pay period, is not permitted when calculating minimum wage. Salary can only be averaged over a week. The Government is now looking at amending regulations to allow for averaging over a fortnight, and while not a complete solution it will help.
In the meantime, the position in law is that for salaried employees, compliance with the minimum wage should be assessed by comparing the hours worked to the amount of salary paid over a week. This is regardless of whether the employee is paid fortnightly or monthly. If employees are required to work extra hours (and in effect, fall below the minimum wage) then employers must top up the employees' salaries to at least equal $14.25 per hour.
The employer's time and wage records should include information regarding the hours worked and the money paid for the hours worked.
-See the MBIE website for more details on "Keeping accurate records", to find out more Google that phrase.
Federated Farmers has a suite of employment-related guidance and agreements. To get these please contact 0800 327 646. You can also use that number to speak to our friendly team of employment experts.