Indian Newslink April 15, 2016 Digital Edition

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14 BUSINESSLINK April 15, 2016 No leave of absence for employers on Holiday Pay Dave Ananth Do you suspect that the Holiday Pay that you received before Christmas was less than your entitlement? Do you believe that the amount received was wrong or that it was not included in your pay? Holiday Payhas been in the news recently for the wrong reasons, wrong calculations or a botched IT payroll system. Some employers got it wrong and have paid massively for it. In 2014, an Auckland company was ordered to pay $256,000 in Holiday Pay including interest to a former manager, on top of a multi million dollar payout. The Court ruled that the manager was entitled to Holiday Pay on earnings received after the last day on the job. The ruling was clear that employers are obliged to give Holiday Pay on gross earnings, including bonuses or commissions received after the job is over. Universal application Holiday Pay is governed by the Holiday Act 2003, Section 3 of which describes the purpose of the Act, which is to promote balance between work and other aspects of employees’ lives and to provide employees with minimum entitlements. The provisions of the Holidays Act apply to all employees regardless of whether they are full-time, part-time or casual. It does not discriminate. The Statute provides that every employee is entitled to a minimum of four weeks’ annual leave per calendar year, exclusive of public holidays after one year of work. This is paid leave. Employees must be given the opportunity to take two of the four weeks as continuous holidays if they so wish. Section 6 of the Act states that the Act entitlement herein guarantees employees’ minimum rights. It does not prevent them and their employer to negotiate better holiday conditions. At the first instance, for most people, the name in itself seems to suggest that Holiday Pay is designed to give you more money for your holidays. That is not the case. The aim of the Holiday Pay Act 2003 is to give employees ‘Paid Holiday.’ Employer obligation Employees will be able to take their break, go surfing and return to work rejuvenated. Holiday Pay does not replace a wage or salary. It is on top of your regular pay. If the employee does not have the holiday on the day itself because they have agreed to work, then they must have it at some other time. The Courts have ruled that an employer cannot contract out of the legislative obligation of providing a paid day off by providing greater rates of pay. Holiday Pay is typically calculated at 8% of gross earnings and is shown as a dollar amount or if they worked less than a year, calculated on a pro-rata basis. The calculation must include all salary, wages, overtime pay, allowances and commission. Confusing calculations The method used for calculating Holiday Pay is the main culprit for the confusion. It gives you two methods of calculating holiday pay,taking the greater of the two as the correct amount as the weekly Holiday Pay. One is based on ordinary weekly pay - earnings over last four weeks, divided by four. The other involves taking total gross earnings in the first continuous 12-month period of employment and dividing these by 52. The higher of the two sums will be used to calculate your holiday pay. Part-timers must agree with their employer on what is a ‘work week’ for easy calculation of Holiday Pay. Recurring mistakes Mistakes happen when 8% is taken from the employment contract sum rather than what is actually in the pay packet. It is suggested that a method encompassing full and parttime employees is designed for certainty and clarity. It is good practice to separate the wages from the Holiday Payin the pay packet. This will make them easily traceable in future and avoid complications. The employer could be forced to pay out all over again. Holiday Pay is not paid like regular pay unless it becomes difficult to calculate as your hours are so irregular. Or you are in a fixed term agreement. Otherwise, for all purposes, you will receive Holiday Pay either when you take a holiday, or agree with your employer HOLIDAY= NO WORK NO WORK = NO PAY THEREFORE HOLIDAY = NO PAY NEITHER LOGICAL to cash up some of your holiday entitlement, or your employment ends. A local daily reported that the Labour Inspectorate confirmed that since 2012,more than 40 employers have been investigated for payroll-related NOR LEGAL! breaches of the Holidays Act and more targeted investigations are planned. It is time that some certainty is given to the law on Holiday Pay which at this juncture is not a vacation at all. Dave Ananth is an experienced tax barrister practicing in Auckland. He was an IRD Prosecutor based in Manukau before establishing his private practice. He is now in Malaysia advising on GST compliance on a two-year contract. He is a regular speaker at various conferences and seminars. Email: davetaxnz@gmail.com; www.davetaxnz.nz The above should be read as of general interest and should not be considered as legal advice or suited to all persons at all circumstances. You should consult your employer or seek proper expert or legal advice (at no cost to the author or to Indian Newslink and its employees) in respect of your case. No exemptions for employee rights Gurjinder Singh New Zealand has a comprehensive set of employment laws that keep workplaces fair. International students have rights like New Zealand citizens and residents in the matter of employment, but they must be aware of the relevant laws and rules. There are thousands of students working on casual and part-time basis. Those on casual employment must be available when required by the employer tofill a leave vacancy, meet an unforeseen situation or work during odd hours. The employer is not obliged to offer work. But a person may decline to work in a shift but once accepted must carry out the specified duties. Such jobs are usually based on business needs. The employment will terminate at the end of each engagement but a person can re-engaged as per the terms of the employment agreement. In addition, the following are the basic rights of every worker: minimum hours of work and pay, paid bereavement leave, terminate the employment by short notice as per contract and annual leave pay as part of the wages. However, such employees are not entitled to redundancy notice or compensation. On-Call employees On-Call employees have a somewhat better status than Casual employees, with an ongoing relation with the employer, but the hours of work are not guaranteed. Their working hours are declared before the start of the work;the roster can change on short notice. Repeated non availability may result loss in the On-call status or termination of employment. Such employees are entitled to bereavement and annual leave, in addition to pay. Fixed-term Agreements A Fixed-term Agreement is an employment agreement offered for a specific period of time. The Employment Relations Act (ERA) 2000 allows employers to offer fixed-term agreements under certain circumstances. Such employment should have genuine reasons such as seasonal work, project work, or where the employee is filling in for a permanent employee on leave. The employer should also inform the employee of the reasons, how or when the employment will end.The employee should agree to this in their employment agreement. Rights of illegal workers An illegal immigrant worker is also entitled to protection under ERA. A New Zealand Court ruled thus on a case: “Although Ms R did not hold a work visa throughout her employment at G workplace, the authority commented that as a matter of public policy, any employee working in New Zealand, irrespective of work visa status, is entitled to the protection under the ERA.” The Immigration Act, administered by Labour Department under the Ministry of Business, Innovation & Employment, not only makes it an offence not only to hire a worker without a work visa but also deny them minimum standards of employment. Although this may seem fair, under the Immigration Act, it is not an offence on the part of a person to work without a visa. The Act says that the migrant worker must have a visa, but does not provide any consequence. The employer is bound to pay such employee full wages as well as holiday pay under the law. Leave and holidays Most New Zealand workers would tell you that they get a good amount of leave, at least by international standards. A worker will get a minimum of four weeks’ annual leave and can ask to exchange one week’s leave for cash. In addition, there are 11 public holiday days. If a student works on a public holiday, the employer has to pay them additional wages. The employee will also be entitled for a day off later. Every worker is also entitled to sick leave during a 12-month period. Wages and deductions The minimum wage for adults is $15.25 an hour from April 1, 2016.Income tax is deducted at source- this is known as PAYE (Pay as You Earn) tax. Another, much smaller, deduction is the ACC (Accident Compensation Corporation) levy, which runs the insurance system. Wages are usually advertised as gross, before tax. Every worker will need a tax number known as IRD (Inland Revenue Department) Number - if you do not have one, you may be taxed at a higher rate. It is easy easy to get one right away. Aside from PAYE tax and the ACC levy, your employer is not allowed to make any deductions from your pay without your permission. Discrimination and harassment Discriminating against someone because of the colour, nationality or country of origin, race, ethical belief, religion, political opinion, employment status, age or disability is illegal in New Zealand. Sexual harassment, including requests for sexual contact and any kind of offensive or unwelcome sexual behaviour, is also illegal here. If you think you have been discriminated against or sexually harassed,you can complain to higher authorities at your workplace or the Labour Inspectorate. If you are not sure of your rights or feel threatened, you can seek free legal advice from Citizens Advice Bureau nearest to you. The Ministry website (www. employment.govt.nz) also contains detailed notes on rights and responsibilities of employers and employees. Gurjinder Singh is an ‘Enrolled Barrister & Solicitor (NPC)’ based in Papatoetoe, Auckland. He can be contacted on (09) 2786580 or 021-2354969. Email: gurjinder singh
April 15, 2016 BUSINESSLINK 15 Is a tipping point here? Kamil Lakshman Many articles later we are still on the same topic. Ethnic chefs are being targeted, and management degree holders are lurking in the back. Many have joined the bandwagon. They have caught wind of a nasty smell that is here to stay,but they do not really understand the extent and complexity of all of this. The norm that operates for a job offer, how it works and who all are involved. Disconnectedness and interconnectedness are at play but not obvious to many. Tinkering with policy Should we tinker with this international student policy? Is it possible that the income stream of a potential $ 5 billion industry is too lucrative to substantially alter? What has not been appreciated, which slowly is being, is the wide reaching consequences and issues. A drastic overhaul is needed. The current platform and environment has to go. A fresh start is needed. This is a big ask. The platform has to attract the student being recruited wanting an education outcome. As long as immigration outcome remains an incentive the breeding ground will prosper. Behaviour Pattern A certain behaviour pattern has become the norm. The consequences are portrayed daily in our newspapers, in the courts, in the number of companies unable to survive because of competition from unscrupulous operators who run unsuccessful businesses on paper, pay little taxes but lead a very comfortable lifestyle, have an outward appearance of success funded by such dealings. Those who have started out in this country as victims can potentially see this as an acceptable mode of behaviour and can go on to victimize another. A cycle given birth to which has a long life span cannot be encouraged! The bit that has concerned me greatly from the outset is the normality of it all and how acceptable it is. Some now see it as a norm. There is a certain level of resignation. It is the way it is and within the confines of it a solution is needed usually paying for a job. If the intention was for New Zealand to provide a superior education platform,then we would attract those seeking such a qualification. Education outcome would have been the focus. Export earner New Zealand now sees the international student market as an export earner. The business model and focus is no longer the provision of a world class education system but income. The international student policy is drafted so that the immigration outcome carrot enables to be dangled. This ensures a flow of international students. As long as this carrot is in place, associated with the need for a job offer, the drama will continue. One unfortunate outcome will be that good business operators who fit a certain profile will become subject to suspicion and likely to be smeared by the reputation of unscrupulous operators in their industry. New Zealand’s entire lifestyle is potentially endangered. There is so much at stake than is truly being appreciated! This appreciation will come with time. As they say, time is a great teacher. Supplied content Kamil Lakshman is a Lawyer & Principal of Wellington based law firm Idesi Legal Limited. She can be contacted on (04) 4616018 or 021-1598803. Email: kamil.lakshman@idesilegal.co.nz; The opinions expressed in her article above are her own and not that of Idesi Legal Limited or the New Zealand Law Society, or its Wellington Branch, or its affiliated bodies and committees or Indian Newslink. Readers can send their comments (names can be withheld) to editor@indiannewslink.co.nz Tax Loophole puts New Zealand to shame Dr Deborah Russell Loopholes in New Zealand’s trust law, highlighted by the so-called ‘Panama Papers’ makes this country complicit in schemes to avoid tax. The massive document leak from Panamanian law firm Mossack Fonseca sheds light on New Zealand’s role as an international tax haven. It is shameful for New Zealand to be caught up in international tax avoidance. Inaction irritates The loophole in our laws that allows New Zealand foreign trusts to escape taxation has been known about for years, but nothing has been done to shut it down. This makes us complicit in schemes to avoid tax. While there is nothing illegal about minimising tax, there can be ethical implications. Taxation is the price of civilisation, and very wealthy people and companies who use extreme measures to minimise their tax are free riding on ordinary taxpayers. I believe that it would be comparatively easy to shut the loophole down. The loophole relies on New Zealand tax authorities not collecting and sharing basic information about foreign trusts. New requirements Trustees of New Zealand foreign trusts should be required to disclose the identities of the people putting property into the trusts, and benefiting from the trusts, and Inland Revenue should be authorised to share this information with other countries’ tax authorities. This would enable other countries to pursue people who are sheltering property and income in New Zealand foreign trusts. The only people in New Zealand who benefit from the foreign trusts loopholes are the tax consultants and trustee companies collecting fees from providing trustee services. Shutting down the loophole might reduce these fees, but it would also restore New Zealand’s reputation for being corruption free. Dr Deborah Russell is a Taxation Specialist at Massey University School of Accountancy. Picture Courtesy: Massey News.
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Indian Newslink April 15, 2016 Digital Edition

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