Ministry of Business Innovation and Employment (MBIE) labour inspectorate investigations have made it very clear to farmers that there is zero tolerance for breaches of minimum employment standards.
Some employers need to get up to speed on the requirements or face the consequences, whether it be through complaint or pro-active inspection, appropriate enforcement action will be taken to ensure compliance.
So, for those out there who aren't quite sure, this is for you. I often get asked by farmers how to become legally compliant and whether there is a simple way to clarify and meet the requirements.
Here are some examples you should consider introducing on your own farm, and if you are a small-to-medium-size business owner in town these will apply to you too.
TIME AND WAGE RECORDS
There are two components that need to be complied with
-Time: the actual hours worked.
-Wage: remuneration records in relation to the time that has been worked.
-Employers must be able to calculate values as specified in legislation, including average weekly earnings, relevant daily pay, ordinary weekly pay and average daily pay.
HOLIDAYS AND LEAVE
The Holidays Act 2003 section 81 stipulates that:
-An employer must keep a holiday and leave record that complies with section 2.
-It's mandatory to maintain a record which incorporates the (a) to (q) requirements (3).
-The holiday and leave record must be kept in written form.
-Records need to be open and transparent for the employee, and clearly identify the nature of the leave, for example sick leave, alternative days, bereavement leave and annual leave. Wall planners and diaries are not recommended.
-Rostered days off work (weekends, days off), are not deemed to be paid leave or days worked for the purpose of remuneration.
-Best practice is the use of leave forms completed by the employee and signed by the employer.
All employees must receive at least the minimum wage.
For the purposes of calculating the minimum wage, remuneration can be averaged over a period no greater than a fortnight, which means seasonal averaging is not ideal if results drop below the minimum wage at any point during the year.
Example: Total annual gross earnings divided by 26 fortnights equals the gross fortnightly salary. Dividing the total gross fortnightly salary by the minimum hourly rate will give you the maximum number of hours able to be worked for that fortnight, without breaching the minimum wage.
This is highlighted in the Federated Farmers guidelines for employment agreements: Hours of Work and in the Federated Farmers Best Practice Employment Guide.
Engage the services of organisations such as Federated Farmers, Dairy NZ (NZ People Smart programme), Beef+Lamb farm advisers or rural employment specialists.
They will help you set up customised systems for things such as employment agreements, roster and timesheet recording, payroll, holiday and leave recording.
You might wonder what happens if you are found to be short of the minimum employment standards.
-A labour inspector can seek voluntary compliance with the employer, to implement and improve their systems and, if applicable, pay any employee arrears due.
-It is in an employer's interests to comply, and work with the inspector as this will mitigate the need for an inspector to pursue enforcement action.
-If the employer is not willing to comply voluntarily, a labour inspector has the power to take various enforcement actions, for example issuing an improvement notice or lodging a non-compliance action with the Employment Relations Authority.
In the past few months, I have had employees ring me about employment agreements they have been offered which are the size of the Bible and have been cut and pasted from various sources, including our own Federated Farmers agreement. This is not something you want to DIY on because you can get yourself into trouble.
Employers face huge risks because the law and the court favours one side when they come across this - and it's not the employer.
The simple advice I have given people is, if you don't understand it, don't sign it. Employees should be advised that they can seek independent advice on their agreement and they need to be given time to do that.
Our agreements are a big seller for the main reason that they are practical, in plain English and are farming-specific agreements written by farmers for farming businesses.
While members get a great deal on contracts, non-members are still saving a bucket-load compared with paying a lawyer to draw one up.
In an average year we sell 9500 employment agreements to farmers, rural business consultants, accounts and lawyers.
So if rural professionals find it easier to use our agreements than developing their own, why would you, as an employer, take the risk? There is also free support and advice from Federated Farmers policy and legal teams if you have any questions.
There are a lot of resources out there to help you get up to speed.
Federated Farmers Waikato plans to run seminars on this with our industry partners to make sure our members don't run afoul of the law.
-Chris Lewis is Federated Farmers provincial president.