Expecting a pay rise? This could be your month. Photo / iStock
Expecting a pay rise? This could be your month. Photo / iStock
Opinion
Up to $1m of pay owed to Kiwis is being written off every single day, writes Council of Trade Unions secretary Sam Huggard.
Many employers and payroll providers have been miscalculating holiday pay for over a decade. They have been making the wrong choice about what counts as part of your everyday pay, how you earn leave and which of two formulas to pick when you have changing work hours.
What that means is there are a lot of people who have missed out on a lot of pay. We've seen examples including fast food workers who have lost $200 on just one week's leave, and security guards owed up to $1800. In fact the Government's own figures put this loss at up to $2.3 billion across 750,000 New Zealand workers over the last six years.
Compounding this problem is the fact that the statute of limitations means those claims expire after just six years. And that means that up to $1 million of pay owed to New Zealanders is being written off every single day.
Meanwhile most New Zealanders are unaware of the fact they're owed this money, and of how they can get it back before it's too late. The Government hasn't helped this by keeping the scale of this problem secret for nearly two years; in the end it took an Official Information Act request to bring it to light.
This is a big problem but it's a problem that can be fixed. Indeed, New Zealand unions are already in the process of resolving it for their members, and although it's early days yet, for the most part, employers have been happy to sort out their payroll and pay back the money they owe people.
What's needed is a high-level fix that is agreed on by unions and business and acted on by the Government.
However, the scale of the issue means this won't happen quickly, and as more examples are raised, workers, employers, mediation services, Government labour inspectors, and the employment court will start to come under strain. Some cases have taken a year to be settled, and in union we are only so many New Zealanders. What's needed is a high-level fix that is agreed on by unions and business and acted on by the Government.
But no matter how we do it, fixing this problem and making sure New Zealanders get the back-pay they are owed will take time. And meanwhile, $1 million is lost every day. That's why we've asked the Government to urgently stop the clock on the statute of limitations. We need to make sure that New Zealanders don't continue to lose money while we try to fix the problem.
We've even drafted up some legislation that will do this and we're confident that it will have support across the house - if the Government puts it to Parliament under urgency as they have with past legislation. In fact just last year the House passed legislation to validate speeding tickets through all three readings in just two hours. If the Government prioritises this issue, it could be done as early as next week.
We want to address this problem with a constructive, moderate legislative approach at a high level. The alternative is thousands of individual claims across thousands of employers. We don't think that's the most efficient way to resolve this problem and it would leave thousands more unrepresented workers out in the cold.
Regardless of the final mechanism for paying workers what they are owed, the responsible thing for the Government to do is to stop the clock. New Zealanders should not have to continue to lose money while we sort this out.
