The past few years have seen significant cost increases for employers, as the Government pursued ideologically inspired legislation. Photo / 123rf
The past few years have seen significant cost increases for employers, as the Government pursued ideologically inspired legislation. Photo / 123rf
OPINION
Although news that the Government’s planned employer insurance scheme is being shelved is likely to come as a relief to employers, any celebration of cost saving will be short-lived because on April 1, the minimum wage will go up to $22.40.
Putting aside record inflation and diminished productivity born of natural disasters, an unforeseen pandemic and international conflicts, the past few years have seen significant cost increases for employers, as the Government pursued ideologically inspired legislation.
The employment-related costs of doing business have increased significantly over recent years and putting aside the increase in the minimum hourly wage, employers now need to accommodate a potpourri of new costs, including:
Sick leave increasing from five days to 10 days
The introduction of 10 days’ domestic violence leave
Increased coverage of bereavement leave and when it can be taken
An additional public holiday in Matariki, and
An increase in parental leave from 18 to 26 weeks.
While these are all good things for individuals and promote wellbeing, they still bring with them significant costs that employers must somehow meet.
But wait, we are not finished there. Now working its way through Parliament, the law change that will enlarge the timeframe for raising a personal grievance in relation to sexual harassment from 90 days to 12 months is coming. This will also put more pressure on employers to run expensive and lengthy investigations so they can better understand allegations that are made many months after the event.
The pressure on employers comes not just from the law itself. There is social pressure too. The influence of central government flows on to larger employers, and in turn to smaller businesses who sometimes simply cannot keep up.
David Grindle is director in charge of the employment law team at WRMK Lawyers. Photo / Supplied
For example, the Reserve Bank offers five weeks’ paid annual leave each year, above and beyond the four weeks required by law, plus an additional three weeks of flexi leave that employees can “purchase” for the cost of 2 per cent of their total pay. Not to be outdone, ANZ recently introduced six weeks of paid gender affirmation leave, and up to 12 months’ unpaid leave, to its employees in New Zealand and Australia. The availability of these kinds of extra benefits in the high-profit banking sector still impacts upon the thoughts and minds of workers in other sectors and creates expectations that many small-to-medium enterprises cannot countenance.
While there is a race for the populist vote before this year’s general election, the social insurance scheme will not see the light of day but in the fullness of time it is likely to be dusted off and reintroduced. In its present form, the social insurance scheme proposes that workers retain 80 per cent of their wages after losing their jobs due to redundancy, layoffs, health conditions, and disabilities. It is proposed the scheme is paid for by a range of things, including a 1.39 per cent levy on workers and employers.
In a modern-day society we strive for balance in all things, and harmony between the needs of employers and employees is no different. It’s a matter for the individual to decide where the pendulum has swung in achieving that balance, but for every action there is an equal reaction and it’s hard to see how the extra costs imposed upon employers can be absorbed without passing costs on to consumers. But, that is an issue for another column.
– David Grindle is the director in charge of the employment law team at WRMK Lawyers. He has practised in this area of the law for 17 years.
