Farmers - 'Top up' payments OR 'Time in Lieu'
SALARIED EMPLOYEES – Hours of work versus minimum wage
All employees must be paid at least the minimum wage for every hour they work, and this applies to employees who are paid by the hour and those who receive an annual salary. You can’t average an employee’s salary or wages over the season, however you can average it over their pay period, e.g. weekly/fortnightly.
Accommodation Allowances which are an agreed true benefit paid to an employee can be included in gross annual salary calculations.
Example: Gross salary $45,000 divided by 26 fortnights divided by $16.50 (current Minimum Wage) = Maximum 104 hours per fortnight.
If an employee works over the 104 hours they should receive a ‘Top up’ payment for additional hours worked at the Minimum Wage. https://www.dairynz.co.nz/media/5789232/hours_of_work_versus_minimum_wage_april_2018.pdf
‘Time in Lieu’
By agreement a clause can be added to an employee’s Employment Agreement that during the busy calving season, extra hours worked above an agreed average (e.g. 104 hours) can be recorded and banked to ‘Time in Lieu’. During the dry season, where hours worked are less than the agreed average, ‘Time in Lieu’ hours can be used.
The clause can also provide that there is no provision to pay out any remaining ‘Time in Lieu’ hours and employees will be encouraged to use the leave.
If you need assistance with a variation to an employment agreement or any HR assistance, please contact People in Mind https://www.peopleinmind.co.nz/hr-services/complying/
Employers are required by law to maintain wage, time and leave records for each employee whether they are waged or salaried. Timesheets ensure an accurate record of the actual hours being worked by employees. These can then be monitored to ensure hours meet their employment agreement terms. If you and your employee have agreed to ‘Time in Lieu’, these hours must be recorded accurately. https://www.dairynz.co.nz/people/employer/rosters-pay-and-leave/timesheets/
For Farming Payroll Software & mobile phone timesheet APP – check out https://www.paysauce.com/feds/
IRD PAYDAY REPORTING
Compulsory from 1 April 2019
We’ll cover this topic in our next news4wd but in the meantime, check out the latest information from the IRD. The Accounted4 payroll team will individually contact our clients who outsource their payroll/PAYE to us to advise you of your options. Check out https://www.ird.govt.nz/forms-guides/number/forms-1200-1299/ir1214-paye-filing-changing-factsheet.html
Don’t put your head in the sand, start making a plan now!