New Zealand govt sets up task force to tackle staff underpayment New Zealand govt sets up task force to tackle staff underpayment

New Zealand govt sets up task force to tackle staff underpayment
06 Jun 2018

The New Zealand government is setting up a task force to tackle payroll problems that may have left hundreds of thousands of workers out of pocket.

Staff are believed to have been widely underpaid due to mistakes calculating holiday pay under the complicated Holidays Act. Officials estimate that in 2016, up to 760,000 workers could have been affected, bringing the total cost to more than NZ$2 billion (US$1.4 billion).

The police, district health boards and the Ministry for Business, Innovation and Employment are among those caught up in the problem, according to TVNZ.

Workplace relations minister Iain Lees-Galloway said the new task force would look at ways to simplify the Holidays Act.

"There's been enormous change in our labour market over the past fifteen years and it's clear we need to look at the Holidays Act with a fresh pair of eyes and ensure it is fit for modern workplaces and new working arrangements," he said.

The current legislation was proving "difficult and costly" for employers to follow and workers were missing out on what they were owed, he added. 

The problems stem chiefly from the different ways that employers can calculate holiday pay. Workers are entitled to their ordinary weekly pay, or an average over 12 months, whichever figure is higher. But it can be difficult to calculate if an employee has worked variable hours or received a commission or one-off bonus payment.

The task force, chaired by Victoria University law professor Gordon Anderson, is expected to report back in mid-2019. The Labour Inspectorate says it will continue to support employers to help them make up for historical underpayment, and will keep on with its programme of audits and investigations.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

The New Zealand government is setting up a task force to tackle payroll problems that may have left hundreds of thousands of workers out of pocket.

Staff are believed to have been widely underpaid due to mistakes calculating holiday pay under the complicated Holidays Act. Officials estimate that in 2016, up to 760,000 workers could have been affected, bringing the total cost to more than NZ$2 billion (US$1.4 billion).

The police, district health boards and the Ministry for Business, Innovation and Employment are among those caught up in the problem, according to TVNZ.

Workplace relations minister Iain Lees-Galloway said the new task force would look at ways to simplify the Holidays Act.

"There's been enormous change in our labour market over the past fifteen years and it's clear we need to look at the Holidays Act with a fresh pair of eyes and ensure it is fit for modern workplaces and new working arrangements," he said.

The current legislation was proving "difficult and costly" for employers to follow and workers were missing out on what they were owed, he added. 

The problems stem chiefly from the different ways that employers can calculate holiday pay. Workers are entitled to their ordinary weekly pay, or an average over 12 months, whichever figure is higher. But it can be difficult to calculate if an employee has worked variable hours or received a commission or one-off bonus payment.

The task force, chaired by Victoria University law professor Gordon Anderson, is expected to report back in mid-2019. The Labour Inspectorate says it will continue to support employers to help them make up for historical underpayment, and will keep on with its programme of audits and investigations.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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