What is employment law?

Employment law is the legislation which governs the relationships between employers and employees. Legislation is different in every country, and sometimes varies region to region within countries.

Employment law generally covers (but is not limited to):

• Employment contracts
• Employment types (full-time, part-time, contract, freelance, etc.)
• Hiring and recruitment
• Dismissal and termination of employment
• Occupational health and safety
• Workers’ compensation
• Workers’ rights
• Discrimination in the workplace
• Employee entitlements including annual leave, maternity leave and long service leave, amongst others

Why is it important for businesses to stay on top of employment law updates?

Employment law is always evolving. As society, and consequently the needs of employers and employees, change – so too must employment legislation.

Sometimes these changes will come in the form of amendments or reforms to legislation, sometimes important requirements will be changed to processes that affect businesses, sometimes statutory rates of pay or contributions will be amended, and sometimes new precedents will be set by cases seen in the court.

This can have a range of impacts on businesses. For example, if statutory rates of pay have changed but you have not updated your payroll, you could be at risk of non-compliance. If you’re not up to date with the latest rules around leave entitlements, your employees may be justified in making a complaint.

To make matters more complex, different employment law updates will affect different businesses in different ways. That’s why we always recommend not only keeping track of employment law updates, but seeking professional advice for your personal situation from a qualified employment lawyer.

Looking for more information about payroll in New Zealand? Download our guide to the basics of payroll in New Zealand.

How often does employment law change?

In a word – constantly. Like the rest of the legal system, employment law is constantly evolving, being amended and being updated.

A country’s law and policy-makers are always looking for ways to improve legislation and employment rules, in line with emerging needs or current events. As stated above, there are many legal changes happening at any one time, for any number of reasons.

We created our Employment Law Updates Factsheets to alert you seasonally to changes both current and upcoming, so feel free to check back on this page each quarter to stay up to date.

We know that it’s especially challenging as an SME leader, who doesn’t have the luxury of an in-house legal team or an expansive HR and administrative team to stay on top of these updates. We want to support you so that you can feel ahead of the curve when it comes to employment law, and future-proof your business in line with emerging legislation.

It’s all part of our commitment to making employment easier and more rewarding for everyone.

Should your business get help from employment law experts?

100%. This Employment Law Updates Factsheet is general in nature and does not speak to your specific situation. The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice.

There are a thousand variables when it comes to the application of business and employment law compliance. This can include the industry your business is in, the number of employees you have, the location of your business – and so much more.

Our factsheets can provide a great point of reference for new or upcoming employment law updates. You might use these to kick-start discussions with your legal expert, or to seek further personalised advice on how these updates will impact your business.

Want a more basic overview of HR compliance? Download our free guide to HR compliance in New Zealand.

How can Employment Hero help you manage your employer obligations?

Employment Hero’s advanced (but easy-to-use) HR and payroll platforms have been purpose built by employment experts for the needs of SMEs.

Our features are here to help you boost your compliance confidence with employment laws. Just a few of the ways in which our best-in-class platform can help include:

• A library of HR policies created by employment experts which you can easily customise, issue for acknowledgement by your team, and update
• Certification management, with cloud-based storage of your team’s certifications and qualifications that are necessary for them to complete their role
• Digital employment contracts which are stored on the cloud and easily accessible from your employees’ mobile app
• Time and attendance tools, helping you and your team keep track of their working hours
• Payroll reporting and contribution calculation; our payroll platform can help you complete payroll correctly
• Automated pay runs and pay slips, to help you with payroll admin and reduce human error

Employment law updates from 2023

90-day trials are open to all businesses

A Bill was passed on 22 December 2023, making 90-day trials for employees available to businesses of all sizes. Previously, 90-day trials were only available for businesses of 19 employees and under. Larger businesses could only use probation periods, which had different rules and regulations. 

The only exception to this is for employees on the Accredited Work Visa, where employers must not include a trial period in their employment agreements. 

Fair Pay Agreements have been scrapped

Following the October 2023 election, the new Minister for Workplace Relations and Safety, Brooke van Velden, confirmed that all Fair Pay Agreements legislation will be scrapped, and it was officially repealed on 20 December 2023. This brought to an end the short-lived Fair Pay Agreements. 

While no industry groups had reached the final stage past bargaining, all applications in process have ceased and no more will be started. 

Modern slavery legislation

On average, we spend $34 a week on products linked to modern slavery. Still, our legislation hasn’t quite caught up in tackling the issue, falling behind countries like Australia and the UK who already have modern slavery laws in place. Modern slavery is an issue wherever you live, and often New Zealanders will have no idea that they’re accidentally contributing to it.

In August 2023, Deputy Prime Minister at the time, Carmel Sepuloni, announced proposed rules that, if passed, would compel organisations with more than $20 million annual revenue to list exploitation risks in their operations and supply chains on a public register. While drafting the legislation is expected to take six months, it’s estimated that it could take three years for this proposed system to become operational.

Parental leave payments increased

Good news for expectant parents – from 1 July 2023, parental leave payments increased to reflect the rise in average weekly earnings. The maximum weekly gross rate for eligible employees is now $712.17, an increase from $661.12.

Health and safety committees and representatives

Significant changes were made to health and safety committees and representatives under the Health and Safety at Work Act. The three major changes took effect on 12 June 2023 and businesses should take note of the following:

• If a worker requests for a health and safety representative, then the business must initiate an election.
• If a health and safety representative or five or more workers asks for a health and safety committee, the business must establish one.
• A small business can no longer rely on saying they do not fall under the ‘high-risk sector or industry’ as the reason to decline a health and safety representative or committee.

An amendment to the Employment Relations Act

A bill was passed on 12 June 2023, extending the time available to employees to raise a personal grievance around allegations of sexual harassment. It increases the timespan from 90 days to 12 months. This bill is officially titled the Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill.

For employers, the Bill requires current and future employment agreements to provide specific reference to this timespan for grievances related to sexual harassment.

A minimum wage update

The 2023 update to the minimum wage rate came into place on 1 April 2023, raising the rate to $22.70 per hour. This was applicable to employees aged 16 and over.

The only exceptions are for starting-out employees or trainees – their minimum wage rate became $18.16 per hour.

New wage threshold for migrant workers

A new wage threshold for migrant employees came into effect on 27 February 2023, to match the national median wage of $29.66 at the time. This applied to those in the Accredited Employer Work Visa (AEWC), residence visa categories and green list occupations.

Employment law updates from 2022

Introduction of the Matariki public holiday

On Friday 24 June 2022, Matariki was officially celebrated with a public holiday in New Zealand, to be continued annually. The public holiday will shift each year because it follows the lunar calendar but will most likely always fall between June and July.

Matariki is sometimes referred to as Māori New Year. Matariki is also the Māori name for the group of stars also known as Pleiades or the Seven Sisters, which are visible to the naked eye at a specific time during the year. It is a time for celebration, growth and renewal. It’s also a chance for people to come together to remember those who have passed away, share food, tell stories and sing. Learn more about celebrating Matariki here.

Minimum wage increases

On 1 April 2022, the minimum wage increased in New Zealand. The adult minimum wage increased from $20 per hour to $21.20 per hour. The starting-out and training minimum wage increased from $16.00 per hour to $16.96 per hour.

Temporary collective bargaining changes have been removed

The NZ Government decided to remove the temporary modifications to collective bargaining rules. In response to the pandemic, temporary modifications were made to the Employment Relations Act.

This paused multiple timeframes in collective bargaining that would apply in usual circumstances. It also allowed unions to nominate an alternative agreement if the previous was impracticable due to the pandemic (e.g. in-person meetings).

The existing processes and timeframes for collective bargaining have now been reinstated (effective 6 May 2022). This is under the Epidemic Preparedness (Employment Relations Act 2000 – Collective Bargaining) Immediate Modification Order 2020.

Fair Pay Agreements

On 29 March 2022, the New Zealand Government announced it was planning to introduce a Fair Pay Agreement (FPA) system.

This is one of the biggest changes to NZ employment legislation in modern times and is designed to regulate working conditions and pay for employees. Taking a similar approach to modern awards in Australia, these changes will help standardise employment conditions as the cost of living continues to skyrocket.

Put simply, the Fair Pay Agreements will involve both employers and unions advocating for employees. This will include minimum conditions of employment for each sector by ‘bargaining’ for set minimum rates of pay and conditions.

The Fair Pay Agreement Bill was passed in late 2022. Find out more about the changes here. 

Changes to bereavement leave

The government passed new legislation regarding paid leave for employees following a miscarriage or stillbirth. New Zealand became the second country in the world to introduce this kind of law, after it came into effect on 1 April 2021.

Employees are entitled to three days of paid leave in the event of a miscarriage or stillbirth. This applies to the pregnant parent and their partner, plus parents that are planning to adopt, are using a surrogate, or carers that have a whāngai arrangement. Employees become eligible for bereavement leave after six months of employment. They are not required to provide proof of pregnancy, miscarriage or stillbirth to take this leave.

Employment law updates from 2021

Minimum wage increased

As of 1 April 2021, minimum wage increases applied in New Zealand. The adult minimum wage increased from $18.90 to $20.00 an hour. The starting-out and training minimum wage increased from $15.12 to $16.00 an hour.

Minimum wage rates apply to all employees aged 16 and over, who are full-time, part-time, fixed-term, casual or working from home. They apply to all hours worked with no minimum hours requirement.

Get the latest employment law updates

Ready to learn more about the latest updates to employment law? Download our free factsheet now by filling in the form on the right.

For more information, visit the Ministry of Business, Innovation and Employment website.