Navigating New Zealand Employment Laws for Casual Employees

by Lynley Averis  - January 15, 2023

In New Zealand, casual employees are workers who don't have a fixed-term contract and are employed on an as-needed basis. It's important for employers to understand the nuances of these employment laws in order to ensure compliance with the law. This article will outline the key points that employers need to know when it comes to hiring and managing casual employees in New Zealand. 

Working in New Zealand as a casual employee has certain legal rights and responsibilities which are outlined by the Employment Relations Act and the Holidays Act. It's important for employers to understand these regulations and make sure they comply with them, otherwise, they could face serious consequences.

The laws have been designed to ensure that casual employees receive fair pay, job security, protection from discrimination, and holiday entitlements.

Employers are obligated to inform their staff about all of these rights upon hiring them, so it helps both sides when everyone understands their obligations under the law.

Employment Agreement

New Zealand employment law states that, even if you are employed for just a three-day rock festival, you must be provided with a written employment agreement by your employer. This agreement must lay out the terms and conditions of your casual employment, including the duration and payment details. If you have been employed for a fixed term period (such as over the university summer holidays), your employer must still present you with an agreement which specifies the exact length of your employment, along with any reason why it is fixed-term. Having this information in writing ensures that both the employee and employer understand the full extent of their obligations to each other.

Payment Requirements for Casual Employees 

Under the Minimum Wage Act 2020, all employees must receive at least the minimum wage rate (currently $21.20 per hour) for any work performed in New Zealand regardless of their citizenship or visa status. Employers should also be aware that deductions from wages are prohibited unless authorised by law or agreed upon by both parties in writing prior to any deductions being made. Furthermore, employers must keep records of payments made to casual employees under the Minimum Wage Act 2020.  

Entitlement to Annual Leave

Under New Zealand law, casuals must be paid 4 weeks of paid annual leave after they have worked 12 months or more. This annual leave accrues at the rate of 8% of their gross earnings (including overtime). Most employers pay this “annual leave” as 8% holiday pay with each pay but by law this is only allowable if the employee works so intermittently or irregularly that it is impractical for the employer to provide them with 4 annual weeks holidays. Casuals are also entitled to 11 public holidays per year provided it is their normal working day. If they work on a public holiday, casuals must be paid time-and-a-half for their work hours, plus a day off in lieu (provided the day they worked was their normal working day).  

Sickness and bereavement leave

Sick leave and bereavement leave are integral components of a healthy work-life balance. It is important to understand that all employees, no matter their working conditions, have the same entitlements - which greatly benefits casual employees. That said, it is important to note that the six-month employment period threshold for claiming such leave must be met in order for employees to take advantage of this workplace benefit. It is beneficial for employers and employees alike to familiarise themselves with these laws so that everyone’s rights are properly respected within an organisation.

Currently, all employees (including part-time and casual employees) are entitled to 10 days' sick leave per year if:

  • they have six months’ current continuous employment with the same employer, or
  • they have worked for the employer for six months for:
  • an average of 10 hours per week, and
  • at least one hour in every week or 40 hours in every month.

All employees (permanent, fixed-term, part-time and casual) can use bereavement leave if:

  • they have worked for the employer continuously for six months or:
  • they have worked for the employer for six months for
  • an average of 10 hours per week, and
  • at least one hour in every week or 40 hours in every month.

Conclusion

Hiring and managing casual employees can be complex due to New Zealand’s intricate employment laws regarding pay and entitlements such as annual leave and public holidays. To ensure compliance with applicable laws, employers should familiarize themselves with all relevant regulations before hiring casual staff members and should also keep accurate records of payments made to those staff members in accordance with the Minimum Wage Act 2020. 

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