KEY POINTS:
National's proposed changes to KiwiSaver could give employers an opportunity to cut wage increases and use the money to pay their contributions to the scheme, unions and employment specialists say.
National wants to repeal legislation introduced weeks ago stopping employers from paying staff who join KiwiSaver less than
colleagues who don't.
Labour Minister Trevor Mallard introduced the changes after reports that some employers were docking pay to cover the compulsory 1 per cent contribution, while pocketing tax credits the Government gives to cover the contribution.
National has said it would let employers give an equivalent pay increase to their non-KiwiSaver employees and leave it up to employers and employees to negotiate a deal in good faith as long as it met the minimum requirements.
It would also amend the KiwiSaver Act to make it clear no employee could have gross taxable pay reduced because they had joined KiwiSaver.
But Simpson Grierson employment specialist Samantha Turner said it was not clear how National would stop employers reducing pay increases to pay for KiwiSaver contributions.
Council of Trade Unions chief economist Peter Conway said the proposed changes would result in workers paying for the employer contribution by forgoing wage rises.
"While they can't cut somebody's pay, it will mean employers can say 'I won't increase your pay because I'm going to have to contribute 2 per cent to KiwiSaver'."
Engineering, Printing and Manufacturing Union EPMU national secretary Andrew Little said dropping the Government's tax credit to employers would mean they would have to look elsewhere to find the money.
Employers and Manufacturers Association chief executive Alasdair Thompson said it was not clear yet whether National would let employers increase the pay of those not in KiwiSaver so they could keep the total remuneration of two employees the same.
But he believed any employers who had decided to pay the full 4 per cent contribution would be unlikely to cut that payment.
National leader John Key last night denied his policy would jeopardise pay rises.
The party would legislate to prevent employers reducing workers' pay, although future pay increases were an employment matter between staff and employers.
Mr Key said he had raised similar concerns when KiwiSaver was introduced, and the chance of employers cutting pay increases to finance Kiwisaver contributions was "no more so under our package than Labour's".
More than 800,000 people have joined KiwiSaver since it started in July last year.
