Employment law change agenda for 2022

03 March 2022

The Government’s one party majority in Parliament, unprecedented in New Zealand’s more than 25 year history of MMP, gives Labour a clear platform to change employment law – an area of policy which is intrinsic to the party’s historic purpose and important to its union base.

Although the COVID pandemic has absorbed much of the Government’s energy, there is a lot of legislative and other work going on which has the potential to change the dynamics of the labour market. We have prepared a short overview to catch you up with these developments.

Changes on the horizon

1. Continue to increase the minimum wage

The statutory minimum wage will be raised to $21.20 an hour at 1 April 2022.

2. Legislate for Fair Pay Agreements

The Prime Minister committed in her Statement at the opening of Parliament on 8 February to introduce and pass legislation this year to support Fair Pay Agreements.

Read our commentary on Fair Pay Agreements here

After thoroughly reviewing the latest proposal, we’ve formally refused the Government’s offer. It’s wrong for us to be part of a scheme that will do more harm than good to businesses and employees.Kirk Hope, Business New Zealand
people walking in office

3. Strengthen and simplify the Holidays Act consistent with the recommendations of the Holidays Act Tripartite Taskforce

Workplace Relations and Safety Minister Michael Wood announced on 23 February 2021 that the Government had officials working on the policy design, that they would “involve a range of payroll experts to make sure we get it right”, and that he expected to be able to introduce legislation early in 2022.

Read more here

Other changes on the radar

4. Make it easier for women to gain pay equity in their organisation and across their industry

Government members of the Education and Workforce Parliamentary Committee have indicated a willingness to pursue legislation advocated by the Human Rights Commission which would require larger employers (+100 employees) to report each year to an independent body on their progress in achieving pay equity

employee highlighting notes

5. Extend the living wage guarantee to workers paid by the government via contractors in the cleaning, catering and security guard industries

Contractors in the cleaning, catering and security guard industries are required to extend the living wage (currently $22.75 an hour) to their employees as contracts are signed or renewed after 1 December 2021.

6. Work with unions and employers to develop a better statutory regime to protect dependent contractors

A tripartite working group was established in June 2021 to develop recommendations for law change based on the feedback from a public consultation undertaken by the Ministry for Business, Innovation and Employment (MBIE) in 2020.

The recent employment case of Leota v Parcel Express which determined Mr Leota to be an employee shows how difficult it can be to prove contractor status through the courts. The momentum at the moment is clearly in favour of employment statusVonda Engels, Special Counsel

7. Create an income insurance scheme to protect workers if they lose their job through no fault of their own

The design is being developed on a tripartite basis by MBIE, Business NZ and the Council of Trade Unions (CTU). The scheme if implemented would support workers with 80% of their income for up to 7 months if they lose their job. It would be paid for through a combination of a new employment levy (split between the employer and the employee) and payment by the employer of a compulsory four week notice period. MBIE has a consultation document out for consultation with submissions due by 26 April.

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