Calving is well underway now.
Calving is in full swing for all those dairy farmers, involving extra hours being worked to get through the busy period.
There has been some media over the past year regarding how employees are paid and potential underpayment of time worked by staff - particularly over calving time.
In farming there are seasonal periods of long and short work hours and often accommodation coupled with other non-cash benefits, and a standard working week can range between five and 18 days.
Best practice when employing staff is to cover all expectations in the employment agreement so that both parties know precisely what has been agreed from the outset. The agreement should include (but is not limited to) the following details:
• salary
• accommodation and value (market value)
• other non-cash benefits
• rostered work pattern and period (may differ across the season)
• expected hours of work
• the requirement to record hours worked each day.
In June 2014, the Ministry of Business, Innovation and Employment issued a position statement on minimum wage calculations in the agricultural industry.
It clarified that when calculating minimum wage, the agreed value of the accommodation can be included in the salary but not other non-cash benefits like phone, firewood or meat.
When making the calculation you need to take the number of hours worked over the pay period and divide this by the pay.
If you are paid weekly, this means breaking the calculation down to a week. If you are paid fortnightly (or longer such as monthly) you need to calculate for the fortnight.
Rosters vary from farm to farm and may change seasonally, which can be a nightmare when there are a number of employees on farm.
Ideally use some sort of Excel spreadsheet or computer programme such as Safely to deal with these complex rosters easily rather than a manual pen and paper process.
It is also a legal requirement that all hours worked by employees, annual leave and special leave are recorded.
Options include paper timesheets, a diary, finger or facial recognition systems, a spreadsheet or some type of app. Whatever method, there is always going to be the need to measure employee time against minimum wage for any given pay period. This can be tricky and requires verification to support the calculation.
Rostered time off should fall into each pay period to mitigate the risk of hours worked falling below minimum wage, the best pay period would be fortnightly to keep things simple.
The main points to take into consideration to ensure compliance are:
• Make it mandatory for all farm employees to fill out timesheets of some form.
• If you don't already pay employees fortnightly, look into changing pay runs to a fortnightly period (after consultation with employees).
• Assess whether accommodation is at fair market value and alter as necessary.
Within the dairy and other farming industries, keeping good employees doesn't stop with accurate record keeping.
Keeping things transparent will help keep employees motivated and productive, especially through the calving season when a day off is precious!
- If you need assistance with any of the above, please contact our human resource services, Progressive Consulting, or one of our advisers to discuss our payroll service. This information is general in nature and readers should seek specialist advice before making financial decisions.