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Farmers Need To Up Their Game - Employment Law Breaches Too Common

30 June 2014

The Waikato BOP Magic are in a strong position for the ANZ Championship in netball, the Waikato chiefs have dominated super 15 in the last two years and could be on the way to a second win this season. We can be proud of the Waikato’s winning ways. But there is one dubious record that we should be trying to lose as fast as possible – Waikato dairy farmers have the highest number of breaches of the Employment Relations Act and the Holidays Act in the New Zealand dairy sector.

Labour inspectors visited 44 farms nationwide between December 2013 and April 2014 and discovered that 31 of these farms were breaching minimum employment codes. From 61 individual offences, more than half occurred in the Waikato, Taranaki and Bay of Plenty regions and a quarter of the breaches were related to holiday and leave calculations. The legal requirements to maintain wage and leave records are not being adhered to in many instances and breaches of the Minimum Wage Act appear to be abundant. Nobody wants to have to pay out $6,000 for breaches of the Minimum Wage Act, but that is exactly what happened to one of these farmers. There are several cases still open with the possibility of even harsher enforcement action ahead of us.

 

What do you need to do?

To make sure you’re doing things right and won’t be stung with a fine after a visit from a labour inspector you should make sure you are:

  1. Keeping accurate time and wage records
    The law requires you need to keep accurate time and wage records. You may need to update your employment contracts and farm manual to record your employees’ obligation to comply with this requirement.
  2. Paying the minimum wage
    Making sure you are not breaching the minimum wage act is not as easy as just paying waged employees at least $14.25 an hour. The difficulty comes with salaried employees. “Averaging out” where you pay an employee in equal weekly instalments despite seasonal variations in working hours is not lawful. The dairy industry is unique in that hours dramatically increase during calving and decrease in the dry season so it will usually be easier to have employees on wages
  3. Paying the correct holiday entitlements
    In order to pay your employees their correct holiday entitlements, you will need to ensure that your time and wage records are correct.

 

There’s more to come

The labour inspector visits are part of a long-term operation, which means we should expect more to come.  The next phase will have a focus on farms employing migrant workers. Be warned! Farmers in breach can expect strong enforcement responses, which mean fines of up to $10,000 for individuals and $20,000 for companies.

The unique seasonal requirements of the dairy industry means it can be difficult for farmers to ensure they are complying with minimum wage and holiday requirements. Farmers are strongly encouraged to seek legal advice if they are unsure what to do to ensure compliance.

 

Please email me at barbara.mcdermott@nwm.co.nz with your ideas for future articles.  Keep an eye out for next month’s column, where I will discuss another relevant rural legal issue.


Barbara McDermott is a partner of Norris Ward McKinnon, specialising in commercial and rural law.  With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.   Find out more about us at www.nwm.co.nz