The Government provided an update in April that the much anticipated draft legislation on the new Holidays Act would be delayed until the middle of the year. Following this, there would be a full and robust select committee process. Given the timeframes, this means the Bill will not be passed before the end of the parliamentary term.
So, what does this mean for payroll right now?
It means we are unlikely to see final legislation passed until sometime next year. Factoring in the transition times for some of the more complex of the taskforce’s 22 recommendations, it is likely that some of these changes may not be enacted until 2025. Anybody, or any system, that claims to be compliant with the new Holidays Act must be treated extremely warily because we do not know what the final form will take at this point.
Until we have visibility of the draft legislation, it is difficult to know exactly how the changes will affect Datapay. However, we are continuing to closely monitor developments and have been providing feedback when offered the opportunity. This will hopefully add to the clarity and certainty that we know is required in this complex area.
Fair Pay Agreements Update
The Fair Pay Agreements legislation was enacted on 1 November 2022 providing a framework for the creation of minimum employment terms and conditions that would apply to all covered employees under a particular industry or occupation. This is regardless of whether the employee belongs to a union or not. Fair Pay Agreements are the result of a negotiation between employee and employer bargaining sides made up of eligible unions and employer associations. A broad overview of the Fair Pay Agreements process can be found on the Employment New Zealand
website.
The second package of regulations to support the content of the Fair Pay Agreements was released in May and came into force on 8 June. These regulations define in more detail the form that a Fair Pay Agreement must take, for example how standard hours, overtime rates or penalty rates should be defined. These regulations will help define the form of the Fair Pay Agreements and hopefully limit the variations that will exist between agreements, as well as limit their complexity.
To stay updated with the status of Fair Pay Agreements that are in progress, Ministry of Business, Innovation and Employment (MBIE) have created the Fair Pay Agreements dashboard. The dashboard provides an overview of all applications to initiate bargaining for a Fair Pay Agreement and their status. As at the beginning of June 2023, there are four applications currently being assessed and three that have been approved to begin the formation for bargaining sides.
With only three applications currently at the stage of forming bargaining parties (a potential three month process) followed by the actual bargaining of an agreement, compliance checking, ratification and verification, it is unlikely that a Fair Pay Agreement will come into force before the end of the calendar year. However, we encourage you to review the dashboard and be aware of the industries and occupations that are in the process of applying for or negotiating a Fair Pay Agreement to assess whether your employees may be covered.
PAYE Intermediary Service
The Inland Revenue Department’s (IRD) PAYE intermediary scheme was designed to help small and medium enterprise (SME) businesses comply with their PAYE tax obligations, and Datacom PAYE Intermediary (PI) has been operating under these guidelines since 2003.
Over the past two decades, the benefits of using the service have also been increasingly reflected by Datacom's large enterprise payroll clients, with many top corporate brands seizing the value of ‘IRD hassle free’.
Today, we are New Zealand's largest PAYE intermediary, with more than 25,000 employers using PI at Datacom and transacting more than $300 million monthly to IRD. Datacom PI handles vast volumes of tax obligations and keeps track of all PAYE calculations in a timely and precise manner, providing payday filing monitoring, IRD amendments for payroll corrections, tax payment liabilities, IRD refunds and investigations.
At Datacom, a small team of highly specialised professionals is working behind the scenes with your Datacom Payroll support teams, software developers, and IRD to deliver the best insights in resolving payroll reconciliations. So our clients, such as your payroll and finance team members, can spend less time on these ‘thorny’ IRD/PAYE areas and instead focus more on managing people's pay more efficiently enhancing the overall payroll experience.
Mandatory Payday Filing since 2019 has imposed substantial changes on the tax reporting landscape, which often complicates payroll reversal and adjustments. Our team of experts has the best knowledge and experience in balancing between Datapay and what's being reported and credited to IRD for you.
Datacom PI clients can also enjoy the privilege of having a designated IRD officer from the Significant Enterprise to work with our team in tackling any queries regarding their myIR payroll account.
Let us do the hard work for you by give your Datacom Payroll contact a call today, and asking for more information about Datacom PAYE Intermediary.
