Compensation laws vary widely by country, making it difficult to expand without a full understanding of statutory compensation and benefits. On top of any guaranteed benefits, you’ll also need to research what supplemental benefits other employers are providing to stay competitive in the market.
Working with Globalization Partners is one of the easiest ways to meet all of New Zealand’s compensation laws and provide a top-notch benefits package for your employees. When you partner with us, you can spend your time and resources focused on growing your revenue in New Zealand instead of learning all of the country’s employment compliance laws.
New Zealand Compensation Laws
New Zealand has three different minimum wage tiers — adult, starting-out, and training. Employees ages 16 and older qualify for the adult minimum wage, which is NZ$20.00 an hour before tax starting in April 2021. The starting-out wage is NZ$16.00 an hour before tax and covers:
- 16- and 17-year-olds working for one employer fewer than six months
- 18- and 19-year-olds who meet certain specifications
- 16- to 19-year-olds with an employment agreement requiring 40 credits of industry training a year
The minimum wage for training workers is NZ$16.00 an hour. To qualify as a training worker, the employee needs to be 20 years old or older and have an employment agreement that stipulates at least 60 credits of industry training a year.
Employees in New Zealand get a minimum of four weeks of annual leave, and they can exchange one week for cash. The country also has 11 public holidays where employees get a guaranteed day off. Although you can negotiate more days off, you’ll need to keep this statutory minimum in mind when determining your New Zealand benefit management plan.
Working parents also get certain maternity and paternity leave benefits. Paid parental leave increased to 26 weeks in July 2020. Employees with kids are also allowed to use their sick leave entitlement — called domestic leave — to take care of their sick children or another dependent family member.
New Zealand Benefit Management
In addition to New Zealand compensation laws, you’ll also have to consider any supplemental benefits that may not be mandatory but are expected from employees. For example, employees in New Zealand have access to free or low-cost public health care due to government subsidies. Residents also have the option to choose private healthcare, which employers can opt to provide as an additional benefit.
Although not a legal entitlement, many employees expect a certain level of allowances on top of their salary or wages. You can use these to recognize any notable qualities or skills, special responsibilities, or inconvenient job features. If an employee incurs any costs on your behalf, you can use an allowance to reimburse them.
Benefits and Compensation Restrictions
Collective bargaining agreements (CBAs) are not too common in New Zealand, but you’ll still need to check and see if your employees are covered by one. If so, you’ll need to meet the restrictions of the CBA instead of the statutory minimums.
Contact Globalization Partners
If you are ready to expand to New Zealand, Globalization Partners can help with our New Zealand compensation and benefit outsourcing services. Contact us today to learn more.