Statutory Requirements for Record Keeping and Recommended Changes
The Employment Relations Act and the Holidays Act both place requirements on employers with respect to their employees. These include retaining copies of their signed employment agreements, keeping wages and time records; and producing such documentation upon request by a Labour Inspector.
The Holidays Act also provides certain obligations on employers including that of keeping holiday and leave records. There is an obligation to produce the record, or information from it, or allow access to it, when requested by the employee, their authorised representative, or a Labour Inspector.
The necessity for employers to keep these records is illustrated in a recent case where a Labour Inspector sought a determination because companies had breached various obligations under the Employment Relations Act in that they had failed to produce all time and wage, holiday and leave records requested. They had also failed to provide employment agreements for its workers. Penalties were ordered against each company for these breaches of employment legislation. The Employment Relations Authority ordered each business to pay $7,500 in penalties to the Crown, stating that the failures are a serious breach of the employers’ duties to abide by relevant employment and holiday legislation.
Recommended Changes
There is inconsistency across employment legislation. For example, the Employment Relations Act and Minimum Wage Act have different requirements for recording time worked and this has led to difficulties in assessing whether low salaried and piece workers (workers who are paid by the number of products they create or tasks they complete) are receiving adequate pay.
The proposed Employment Bill to be introduced later this year proposes changes to address these issues.
- Record-keeping requirements for wages, time, holidays and leave will be made consistent across all employment legislation.
- There will be flexibility around the format for records, so long as they can show compliance with the law.
- Infringement notices will be introduced for clear-cut breaches of these obligations with a maximum penalty of $1,000 per breach with a cap of $20,000 if there are multiple breaches.
Cases that involve more serious and systemic and/or intentional breaches of employment standards will be resolved at the Employment Relations Authority or Court, rather than being automatically directed to mediation services in the first instance as is now the case.
- If it wishes, the Authority will continue to be able to send standards cases to mediation if they are mixed up with other employment relationship problems, or if it considers that mediation will contribute constructively to addressing the problem (for example, through clarifying the facts of the case).
- Employees will be able to seek penalties at the Employment Relations Authority for any minimum entitlement breach – currently this is only possible for breaches of the Wages Protection Act.
Brown (Labour Inspector) v Kiwi Labour Solution (2013) Limited and Ors [2015 NZERA Wellington 54; 15/05/2015; T MacKinnon]