Are your employment agreements up to date following the minimum wage increase?

12 May 2021

As you will all know the adult minimum wage in New Zealand increased to $20.00 per hour on 1 April, 2021.  As a result of this we expect many clubs have had to adjust pay rates for employees.  

If you have changed an employees hourly wage or salary it is important that you update the individual employment agreement to reflect this.

Of course any variation to the employment agreement must be done by, agreement.

The Clubs New Zealand Individual Employment Agreement template is silent on how the agreement can be varied, however, we strongly recommend that variations are agreed to in writing (if you do not use the Clubs New Zealand template you will need to check whether your agreements contain a clause relating to variations).

We recommend that you write to each employee, whose employment agreements you are seeking to update, covering off the following:

• Identify the employment agreement that will changed (usually this is best done by date)
• Explain why the variation is needed.
• Identify the clause or clauses that will be varied.
• Set out the new wording that will replace the previous wording.
• Ask the employee to confirm their agreement by signing the letter.

Keep your employment agreements up to date and get them signed

All to often we are called in to assist a club with an employment dispute only to find that the employment agreement has never been updated, or worse it was never signed in the first place.  

You must ensure that your employees have a signed employment agreement and that it is regularly reviewed and updated when and where required.

For example, if there are changes to the nature or terms of the job you should update the agreement. Legally, you have to amend the agreement if the hours of work change (this includes guaranteed hours, days of work, or start/finish times). You can get into trouble if you don’t.

There must be a genuine reason for any changes and any amendments must be discussed with the employee and be made in writing.

Regularly reviewing your employment agreements will also mean you stay compliant with laws and regulations. There are often changes, eg to the minimum wage or how holiday pay is calculated, and you don’t want to be caught out because you failed to update the employment agreement.