Q This is a bit of a curly one for me. I work for an employer who refuses to even acknowledge KiwiSaver. I have been in her employment since 2011 when she began her business. At the time she maintained she would not be able to pay into KiwiSaver because she couldn't afford it. It is my understanding that it is a legal requirement. I have never filled in any paper work or opted out. We, a small group of staff, feel very uncomfortable about bringing this issue up with our employer. If KiwiSaver is a legal requirement, why is there not a system in place to pick up employers who are not contributing? Why is it left to the employee to deal with an issue that could essentially become an employment dispute? I am hoping you will be to give me some advice as to correct legal requirements and what we should do next.
A This is indeed, as you put it, a "curly" one. While I hope that there are not too many employers like yours in Hawkes Bay, this is not the first time I have come across this situation. When KiwiSaver was introduced in 2007 it provided a brief admin headache for employers but didn't cost them anything as the contributions came out of employees' wages. However, in 2008 the employer contribution was introduced at 1 per cent of salary or wages. For the past 4 years it has been 2 per cent and it is set to increase to 3 per cent from 1 April 2013.
The gradual increase has helped employers absorb the cost into their business. KiwiSaver has brought many benefits, one of which is more motivated and productive staff. Staff are a key part of any business, and their well-being should be one of the employer's main priorities. Workers who are putting aside some of their income for future spending are generally happier.
If your employer can't find an extra 2 or 3 per cent to pay into her employees' KiwiSaver schemes, then she either does not have a viable business or she needs some business advice and support. She can get this from our local Chamber of Commerce by contacting the Regional Business Partner.
What is your legal position? KiwiSaver is monitored by Inland Revenue so I contacted their KiwiSaver department about your situation. An IRD spokesman said the responsibility is on the employer to "comply with their contribution obligations. If these obligations are not met the employee should advise Inland Revenue and Inland Revenue will then contact the employer and discuss the issue with them. If an employer does not automatically enrol a new employee, the employee has the option of joining KiwiSaver directly with a provider and advising the provider of their employment details.