Minimum Wage Increase – $18.90 per hour
Effective 1 April 2020 the adult minimum wage will increase from $17.70 to $18.90 per hour. For some this may occur in the middle of a pay period e.g. weekly period Monday 30 March to Sunday 5 April. Employers will need to decide if you want to split the pay rates (30th – 31st March pay the old rate and 1st – 5th April pay the new rate). Or, to save any confusion or risk, consider paying the entire period at the new rate? You can always pay more than the minimum, but never less!
Minimum Wages – Check Your Salaries
With the increase to minimum wage, this will also affect salaries. For anyone on a 40 hour per week salary the new minimum will be $39,312 per annum. Or, for a 45 hour per week salary the new minimum will be $44,226 per annum. If you have salaried employees who work extra unpaid hours you will need to ensure that their total hours worked doesn’t’ decrease their hourly rate to less than the minimum wage rate.
Starting Out Wage and Training Minimum Wages – $15.12 per hour
Effective 1 April 2020 the starting out wage and training minimum wage both increase from $14.16 to $15.12 per hour (which is 80% of the adult minimum wage).
ACC Earner Levy Threshold – $130,911
There is no change to the levy which remains at $1.39 per $100 of earnings. However, the maximum income threshold that ACC earners levy is charged on will increase from $128,470 to $130,911.
Student Loan Threshold – $20,020
Some employees with a student loan tax code will have a few extra dollars a week as the repayment threshold increases from $19,760 to $20,020 per annum. For example, an employee paid weekly won’t have any student loan deduction from the first $385 they earn (an increase from $380). It’s not much, but every bit counts these days!
IRD Changes – Accounts, Payments, Details, Student Loans
Starting in April there are some changes happening in myIR:
- Employer accounts combined into a single activities account so transactions will show up sooner
- Notifications for changes to tax codes, start/stop deductions etc will be grouped and sent weekly as needed
- New Employee Details IR346 and KiwiSaver Enrolment KS1 will be combined into one Employee Details form.
- Hours paid for each employee can be provided (voluntary at present)
- Student loan balances will be much more up-to-date and IRD will notify you in advance when it is almost repaid, final deduction amount, and new tax code
- When filing a return you can choose to pay it at the same time
- Payments made by direct credit will use the new code of EMP (instead of DED)
Primary Carers Leave and Keeping in Touch Hours – Extended
Effective 1 July 2020 the primary carers leave will increase from 22 weeks to 26 weeks. In addition, the keeping in touch hours will increase from 52 to 64 hours.
Coronavirus Covid-19 – Sick Leave Entitlements under the Holidays Act
Unfortunately, this will have an impact on several industries and in turn businesses and employees, in the upcoming months. If an employee is sick, or caring for a sick spouse/partner/dependent, and has run out of sick leave entitlement, then the employee can ask you (their employer) for either:
- Sick leave in advance (employer ‘may’ allow this, section 63(3))
- Use their annual holidays (employer ‘may’ allow this, section 39)
- Annual leave in advance (section 22)
- Leave without pay (section 16(3))
You can also agree to additional sick leave or special paid leave, above the minimum entitlement, if you wish.
If the business needs to close
If you decide to close the business temporarily due to the virus, then you should first try to negotiate with employees as to what type of leave they could take. If no agreement is made, you will have to pay the employees during that period.
If the business has to close because of a government mandate for a civil emergency, you won’t be required to pay your employees (but can do so if you wish).
For full details and information check out the Ministry of Business, Innovation & Employment website.
Finally, mark on your calendars!
IRD, including myIR, with be closed from 3pm Thursday 9 April to 8am Thursday 16 April.
If you have any questions or concerns around anything in this article please feel free to give one of our team a call on 04 2329199 or leave your details below and we will be in touch.