Small business needs to be ready for legislative changes

Neil McAra, Findex
Neil McAra, Findex

We’re set for a number of legislative changes over the coming months that will affect businesses across New Zealand. It is imperative small businesses, including those in the red meat sector, are aware of these impending changes, and plan accordingly to ensure they are compliant when they come into action.

“A number of these changes will impact businesses administration time and have costs to become compliant, and with significant penalties for those who are not.” says Neil McAra, managing partner of Findex states.

Changes are already beginning to be felt. Since 1 April 2019, is it became compulsory for all employers to adopt payday filing.

“In essence, the IRD is shifting some of the compliance for individuals to employers. Rather than waiting up to 50 days from the time a payment is made to receive data for the employee, the IRD can get the information within two days and aim to make any changes before the net time the employee is paid.” McAra explains.

“The IRD is expecting that there will be a number of errors made in the reports that the IRD receives. This is simply because given the reduced time between the date of payment and reporting to the IRD, there is less time for any corrective action to be taken. Therefore, although there will possibly be a grace period from penalties for failing to meet your obligations as an employer, it is important to understand the best way to amend and correct the employer returns. With the introduction to payday filing, there is also the possibility that IRD may be at fault as there are numerous call centre staff that require the right information and training, and software companies are still making adjustments to their software to cope with the various intricacies of payroll,” he says.

Employers must also make an adjustment to ensure their employees have complaint employment agreements by 6 May 2019, as the current framework changes, which says “an employer failing to comply with the above is liable to a penalty imposed by the Employment Relations Authority”, to be an infringement offence, with a fee for breaching of $1,000.

Trial periods for businesses with more than 19 staff will end on 6 May 2019 also, following the changes in the Employment Relations Act 2000. Janet Copeland, from Copeland Ashcroft Law, urges employers to review their current contracts: “The legislation changes offer employers an opportunity to review their current employment agreements and ensure they are both compliant and that their employees all have them,” she says.

Another legislative change that employers need to be aware of is the insulation requirements that will apply from 1 July 2019.

“If you provide your employees accommodation, that effectively makes the employer the landlord for the purposes of the Act,” McAra explains. “In the case where there is a service tenancy agreement, the insulation rules apply equally as they would in a normal tenancy agreement.”

With the above only a briefing of the changes, businesses need to have a full view of how each change could potentially impact their business’ earnings and future. If you are unsure how to implement them or if you are compliant, McAra suggested reaching out to an adviser for help “save yourself in the long run from your fines and reach out to your team of advisers to assist with any changes you need to make.”

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