New Zealand employment is governed by the Employment Relations Act 2000 (ERA), the Holidays Act 2003, the Minimum Wage Act 1983, and the KiwiSaver Act 2006. All employment agreements must be in writing and comply with these statutes. The Holidays Act in particular has been the source of significant underpayment liability across sectors, with reforms taking effect from 2025. The terms below are essential for every NZ employer.
The ERA requires all employment agreements to be in writing, contain certain minimum provisions, and be provided to employees before they start work. Parties are required to deal in good faith — including being active and constructive. Employees can raise a personal grievance (unjustified dismissal or disadvantage) within 90 days of the action. ERA remedies include reinstatement, compensation, and penalties of up to $20,000 per breach.
How ClockIt Helps
ClockIt stores individual employment agreement details, tracks agreed hours and terms, and generates the attendance and pay records that Employment Relations Authority investigations rely on to resolve grievances.
New employees aged 18–65 are automatically enrolled when they start work and have 8 weeks to opt out if they choose. Employers deduct employee KiwiSaver contributions from each wage payment and remit them (along with the employer contribution) to Inland Revenue via payroll. Employer contributions above 3% are voluntary. Employees on a savings suspension cannot receive employer contributions. Employer contributions are tax-deductible.
How ClockIt Helps
ClockIt calculates the employee's elected KiwiSaver contribution rate on each pay cycle, adds the mandatory employer contribution, and generates the employer monthly schedule (EMS) file for Inland Revenue.
The 'greater of' ordinary weekly pay vs average weekly earnings formula has caused widespread underpayment in industries with variable hours, particularly where staff receive regular overtime, allowances, or irregular hours. The government has identified significant underpayment across the public and private sectors, leading to substantial back-pay remediation programmes at major NZ employers. A Holidays Act reform is underway to simplify the formula.
How ClockIt Helps
ClockIt computes both ordinary weekly pay and the 52-week average weekly earnings for every employee on each pay event, automatically applying the 'greater of' rule to ensure compliant Holidays Act leave pay calculations.
Employers pay the Work levy based on their industry classification (Experience Rating applies for larger employers with good or poor claims history). Employees pay the Earners' levy via PAYE. The employer Work levy is calculated on each employee's liable earnings and invoiced annually by ACC in April. Accurate payroll reporting to Inland Revenue (via Employment Information) is the basis of the ACC Work levy calculation.
How ClockIt Helps
ClockIt tracks liable earnings per employee per period, ensuring the payroll data filed with Inland Revenue (from which ACC calculates your Work levy invoice) accurately reflects actual wages paid.
From 1 April 2025, the adult minimum wage is NZ$23.15/hr. A Starting-Out Wage (80% of adult minimum) applies to 16–19 year olds in their first 6 months with a new employer or completing industry training; it is $18.52/hr. Paying below the applicable minimum wage is a breach of the Minimum Wage Act, with penalties up to $10,000 per breach and personal liability for directors.
How ClockIt Helps
ClockIt validates every timesheet against the applicable minimum wage rate for each employee's age category, alerting managers if any shift would result in an effective hourly rate below the legal minimum.
Sick leave entitlement is available after the employee has worked continuously for 6 months, and then again on each subsequent 12-month anniversary. Unused sick leave accumulates up to a maximum of 20 days. Sick leave is paid at ordinary weekly pay (or average weekly earnings, whichever is greater). Employers can require a medical certificate for absences of 3+ consecutive days, or for shorter absences if they have genuine reason.
How ClockIt Helps
ClockIt accrues sick leave from the 6-month qualifying date, tracks carryover up to the 20-day maximum, and applies the Holidays Act 'greater of' calculation when paying out sick leave.
The trial period clause must be agreed in writing before the employee begins work — not after. The employee must genuinely be a new employee (not previously employed by the same employer). Even during the trial period, all other employment obligations apply: minimum wage, holiday entitlements, and good faith. Dismissal during the trial must still follow a fair process to avoid other personal grievance grounds.
How ClockIt Helps
ClockIt records each employee's trial period start date and end date, sending an alert to HR 2 weeks before the 90-day window closes so performance reviews are completed within the trial period if needed.
Bereavement leave became available to employees after 6 months of continuous employment, and is now available from day one for an employee's own child (including stillbirth or miscarriage from 20 weeks). This entitlement is in addition to sick leave and annual leave. The pay rate is ordinary weekly pay (or average weekly earnings, whichever is greater).
How ClockIt Helps
ClockIt manages bereavement leave requests, correctly categorising the relationship and applying the 3-day or 1-day entitlement accordingly, and records the paid leave in the payroll run at the correct Holidays Act rate.
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