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Payroll Team Update

Contractor versus employee

Employees and contractors have different rights and responsibilities, and it is really important as an
employer that you know the difference.
Definition of an employee: An employee is employed to do work for hire or reward under a ‘Contract of Service’ (employment agreement), paid a wage or salary, and has minimum employment rights under various employment laws. Employers are required to keep records such as their employmentagreement, wage, time, holidays and leave records.

Definition of a contractor: Self-employed people are sometimes called ‘contractors’ or ‘independent contractors’. They are engaged to perform services under a ‘Contract for Service’. They earn income by invoicing for their services; pay their own tax and ACC levies. They aren’t covered by most employment-related laws, like annual leave, sick leave and businesses don’t have to hold contractor records.

Legal Tests
In order to establish the real nature of the working relationship the courts have developed some legal tests to help tell the difference. There is the INTENTION TEST, CONTROL vs INDEPENDENCE TEST, INTEGRATION TEST and FUNDAMENTAL/ECONOMIC REALITY TEST. We recommend that you seek legal advice if you are unsure, as there can be significant costs if you get this wrong! For further information check out https://www.employment.govt.nz/starting-employment/who-is-an-employee/difference-between-a-self-employed-contractor-and-an-employee/

Jury Service
Jury service is an important way to contribute to the justice system and your local community. If your employee has been summonsed for jury duty it is important you talk with them about how long they might be off work due to a trial. Some trials can last a day or two however other trials may last the whole week or longer which could affect your business.

You are legally obliged to release your staff member if they have been summonsed for jury duty. If work is busy during the time they have been summonsed and it would have a detrimental effect on the business, you can ask that their service is deferred for another time within the next year. The next time your employee is summoned they must go, jury service cannot be deferred
again. If you are asking your employee to defer their service you must provide them with a letter that they give to the Court to support their request for deferral. The Court then decides if a deferral is granted.

On any day that your staff member has been summonsed for jury duty but they are
not selected for a trial then they should go straight back to work where possible. This will mean minimal impact on your business.  A juror is paid an attendance fee by the Court for their service; some employers choose to make up the difference of this and the employee’s normal rate of pay so that an employee is not losing any money. This is not a requirement unless it has been written into the employment agreement.

REFERENCE:
https://www.employers.co.nz/jury-service-newsletter-july-2017-newsitem.aspx

Payroll team at Accounted4

Anne Bland   Extn.831

Carolyn Lawrence  Extn. 837

Maree Craig  Extn. 825

Kathryn Leong  Extn. 859