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A business owners guide to recent legislation changes

As a business owner, it’s your responsibility to ensure you stay compliant with employment laws and regulations – and keep across any changes that may impact your business.
A women handing documents over


Keeping up with changes to payroll and HR legislations is an important part of staying compliant, and doing the right thing by your people, and your business. 

In this article, we will look at 3 changes which have come into effect in the last business quarter, including the extension to 90-day trial periods, the repeal of the Fair Pay Agreements and the Worker Protection Act.  

Keep an eye out for further changes in the new financial year, subscribe to our emails so you don’t miss a beat.  

90-Day trial periods

Effective December 23, 2023, 90-day trial and probation periods have been extended to include all New Zealand employers. 

The 90-day trial period aims to protect employers from taking on new employees that may end up not having the right skills or fit with the business by allowing the termination of employment, within a trial period of up to 90 days, without reason or risk.  

Prior to this change, 90-day trial periods were available only for businesses with 19 full time employees or less. 

This forms part of the new National, Act, NZ First Coalition Government’s 100-day plan. 

What does this mean for employers?

If you’re a business of 20 FTE employees or more, you can now apply the 90-day trial period to new employees. This means that as the employer, you can choose to dismiss a new employee without the need to give a reason, provided that the trial period has been agreed in the employee's employment agreement before the employee started work and the appropriate notice has been given.

Repeal of the Fair Pay Agreements Act

As of December 20, 2023, the Fair Pay Agreements Act has been repealed and no longer applies to employees, unions, and businesses in New Zealand.

The Fair Pay Agreements Bill was originally introduced into parliament in March of 2022 with the aim to bring together unions and employer associations to bargain for common employment terms and conditions across industry segments or occupations. The Bill received Royal assent in November of 2022 and provided a framework for how Fair Pay Agreements were to be formed. 

No Fair Pay Agreements were successfully concluded during the time the legislation was in place, but a small number of agreements were in various stages of the formation process.

What does this mean for payroll?

Any personal information gathered by employers or organisations for the purpose of a Fair Pay Agreement must be disposed of safely and securely, in accordance with the Privacy Act 2020, as the purpose for which the data was originally obtained is no longer valid.

Worker Protection Act 

The Worker Protection (Migrant and Other Employees) Act 2023 came into force on the 6th of January 2024. 

The Act clarifies the timeframe allowed for providing information requested by a labour inspector before an action could be taken to enforce a penalty on the employer. If records are unavailable at the time of inspection, an employer has up to 10 working days to provide this information. Infringement penalties of up to $1000 per offence may be enforced if an employer is unable to provide the necessary records.   

What does this mean for employers?

It is important for employee documents to be filed securely and be accessible should the employer need to present them to labour inspectors. We recommend being aware of the records that need to be made available and where these records are held. 

We’re here to help.

As a business owner, it’s your responsibility to ensure you stay compliant with employment laws and regulations – and keep across any changes that may impact your business. Luckily, when it comes to payroll, Smarty’s team of experts are here to help – contact our friendly help desk team with any questions about your Managed or DIY payroll today.