KEY POINTS:
Prime Minister Helen Clark says it is not on for employers to be paying workers in KiwiSaver less when the employers were getting a tax credit for their contributions to the scheme.
Labour Minister Trevor Mallard has confirmed the Department of Labour is investigating claims that employers are paying less to workers in KiwiSaver while still claiming the tax credit.
Mr Mallard said it appeared some employers were offering employees who had joined KiwiSaver pay increases that were 1 per cent lower than those given to non-KiwiSaver workers, ostensibly to cover the employer contribution to the scheme.
The employers could then benefit by pocketing the Government's tax credit.
"Employers are getting a tax credit of $20 a week, which will fully compensate for the 1 per cent employer contribution for employees who are on a salary of up to $104,000," Mr Mallard told the Weekend Herald.
"Therefore, any suggestion that employees also have to cover this employer contribution through their remuneration is unethical."
Miss Clark told reporters today she backed what Mr Mallard was saying, particularly given that employers were getting a tax credit for their contribution.
"Where the employee has chosen to go into the scheme, I don't think it's on to be deducting the employer contribution from any consideration of a wage increase," she said.
Mr Mallard would not name the employers who had been accused in letters sent to him, but he said he thought there were about three companies.
He said the Department of Labour was looking into whether the actions amounted to a breach of good faith under the Employment Relations Act, which carried fines of up to $10,000.
Mr Mallard said he might have to consider whether rules were needed to stop the practice.
- NZPA
