Welcome to the end of 2020. We made it !!!
The team at JMA want to take this opportunity to thank everyone for their support this year and to wish everyone a safe and happy holiday period, filled with fun, family and friends.
We are taking our break from 12pm on Wednesday the 23rd of December until 8:30am on Wednesday the 13th of January. Joanne, Anna and Wayne will still be available by phone or email if required.
Message from Inland Revenue
We have received a message from IRD as follows:
” We’ll be sending text messages to myIR customers with low levels of debt on the 10th of December. This campaign will include clients of tax agents with 3 or less outstanding returns, so you may receive some contact from clients.
The amounts due will relate to any account type except student loans or child support, be over 60 days old and between $200 and $10,000. Customers who are inactive or have debt that is already under arrangement have been excluded from the campaign.
Customers will be asked to set up a payment plan by logging into myIR, or to call us on 0800 951-758 if they’d like us to assist them.”
For your information, the text to customers will read as follows:
“Hi IRD here. Need help to get on top of your tax bill? It’s easy to set up a repayment plan. Find out how at ird.govt.nz/instalments or call us on 0800 951-758”
If IRD contacts you please email the full details to us and we will review and respond appropriately, including letting you know whether you really do owe tax.
We would like to know the time and details of the sender.
If you don’t get a message then you can ignore this.
This year, Boxing Day and the day after New Year’s Day fall on a Saturday and are ‘Mondayised’. How this affects employees depends on when they would normally work.
Some public holidays are attached to a specific day of the week, for example, Queen’s Birthday is always on a Monday. Other public holidays are attached to the calendar dates so the day they are celebrated on moves through the days of the week:
- New Year’s Day (1st January)
- The day after New Year’s Day (2nd January)
- Waitangi day (6th February)
- ANZAC Day (25th April)
- Christmas Day (25th December), and
- Boxing Day (26th December).
Mondayisation happens when an employee’s public holiday which falls on a Saturday or Sunday is moved to the following Monday (or in some cases Tuesday).
Mondayisation only happens if the employee doesn’t normally work on the calendar date of the holiday. If an employee normally works on the day of the public holiday’s calendar date then there is no Mondayisation for them and their public holiday benefits apply to the calendar date. For example if they normally work on a Saturday and are working on Boxing Day or the 2nd of January then that is the day their time and a half applies to, not the Monday if they also work that day.
If an employer regularly closes down for a holiday period or seasonal break and requires employees to take annual holidays (or take unpaid time off) this is referred to as an ‘annual closedown’.
This often happens at Christmas time, but some seasonal industries have closedowns at the end of a particular season. An employer can close down different parts of the workplace at different times but must give employees 14 days notice before closing.
Employees who are entitled to annual holidays at the time of closedown
If an employee is entitled to annual holidays, even if they currently have a zero annual holidays balance, they must stop work and take as much of their annual holidays balance as is needed to cover the closedown period. Payment for these annual holidays is calculated in the usual way that payment for annual holidays is calculated.
If the employee doesn’t have a high enough annual holidays entitlement balance to cover the whole closedown period, then:
- in addition to taking all of the annual holidays entitlement they currently do have, they can also take some annual holidays in advance (if the employer agrees), and/or
- they may have to take some leave without pay (or another form of leave as agreed with their employer).
Employees who are not entitled to annual holidays at the time of closedown
Some employees may not be entitled to annual holidays at the start of the closedown because:
- they haven’t worked continuously for their employer for 12 months yet, or
- they have worked for their employer for 12 months but haven’t reached entitlement for annual holidays because they have taken unpaid leave of more than one week and this has moved out their anniversary date for annual holidays entitlement, or
- they have had a period of receiving pay for annual holidays on a pay-as-you-go basis.
There are special provisions for these employees as follows:
- they must get paid 8% of their gross earnings as at the closedown date from:
- the start of their employment if they haven’t worked continuously for 12 months for their employer, or
- their last anniversary date for annual holidays if they have already worked for their employer for at least 12 month, less any amount already paid as 8% pay as you go or already taken as annual holidays in advance,
- in addition:
- the employee may agree with their employer that they take some annual holidays in advance
- the employee’s anniversary date for annual holiday entitlement purposes is moved to the date the closedown starts (or in some situations, an alternative date close by as nominated by the employer).
Holidays and Leave – Just a Reminder of Employees Entitlements
All employees working in New Zealand are legally covered by the Holidays Act (2003). The Act requires that:
- as an employer, you keep accurate records for all employees of the hours worked each day in a pay period and the pay for those hours, and leave accrued, entitled leave and leave taken.
- all employees can take annual leave (depending how long they’ve worked for you).
- all employees are given sick leave and bereavement leave
- all employees get paid leave on public holidays, if they would normally work on that day.
All employees are entitled to at least four weeks of paid annual holidays. This doesn’t include public holidays or sick leave.
Paying Employees for Leave
With the right systems in place, you shouldn’t have too much trouble working out what to pay your employees when they take leave. It’s important to:
- Keep all wage and time records and holiday and leave records up-to-date and accurate.
- Understand what your employees are entitled to — especially those who work irregular or part-time hours.
- Get your calculations right, (use Employment New Zealand’s Holiday tool).
When a public holiday falls on a day your employee would usually work, they’re entitled to a paid day off, no matter how long they’ve been working for you. If they agree to work anyway, you must:
- pay them at least time and a half.
- give them another paid day off later (a day in lieu).
Once they’ve worked for you for six months, employees are entitled to at least five days paid sick leave each year. You must also:
- carry over unused sick leave into the next year. The maximum accumulation is 20 days — although you can provide more if you want to.
- allow employees to use sick leave to care for a sick or injured spouse, partner, dependent child or any other dependent individual.
- pay employees what they’d usually earn for the days they’re on sick leave.
Once they’ve worked for you for six months, employees are entitled to paid bereavement leave of:
- three days if their partner, parent, child, sibling, grandparent, grandchild, or their partner’s parent dies.
- one day on the death of a person outside their immediate family (if you accept that your employee has suffered a bereavement).
They’re allowed to take their bereavement leave at any time and for any reason that relates to the death.
Domestic Violence Leave
Once they have worked for you for six months, employees affected by domestic abuse can take up to 10 days’ paid domestic violence leave.
To qualify, at least one of these situations must apply to your employee:
- They have experienced domestic violence.
- They live with a child who has experienced domestic abuse — even if the child only lives with them sometimes.
Like sick leave, the domestic leave entitlement renews every 12 months. Employees cannot carry over unused days.
You do not have to pay unused days if the employee leaves.
Employees may be entitled to 26 weeks of government-funded parental leave payments. Employees who’ve worked for you for six months (for an average of at least 10 hours a week) are also entitled to take up to 26 weeks of unpaid parental leave.
They can take up to 12 months if they’ve worked for at least 10 hours a week for a year or more. Workers who have worked for you for less than six months may also be entitled to parental leave, in certain situations.
Employees can apply for unpaid leave for any reason — but it’s totally up to you whether or not to agree to it.
If you let an employee take unpaid leave of more than a week throughout the year, you’ll need to consider how it will affect their annual leave entitlements and payment calculations.
Changes to Small Business Cashflow (Loan) Scheme
The Government has announced some changes to the Small Business Cashflow (Loan) Scheme.
- No interest will be charged if the loan is repaid within 2 years. Currently, it is 1 year.
- Restrictions on how the loan can be used have eased. As well as spending on core operating costs, businesses will be able to choose to use the loan to invest in their business, helping it to adapt to the impact of Covid-19.
Also, applications for the loan can now be made until 31 December 2023, an extension of 3 years.
Law change: Privacy Act
The Privacy Act aims to keep people’s personal information safe and secure. The law updates reflect changes in technology and the ways business is done online and offline.
From the 1st of December 2020, there are a few changes to the Privacy Act, meaning businesses must:
- not destroy personal information if someone asks for information held about them
- report serious privacy breaches
- check personal information shared with overseas companies will have similar protection to New Zealand.
Overseas businesses operating in New Zealand must meet privacy requirements, including multi-nationals offering services like cloud software or social media.
The revamped Act gives the Privacy Commissioner greater powers. This includes:
- ordering a business to give a person their personal information
- issuing a compliance notice if a business fails to comply with the Privacy Act.
So, it’s a good idea to appoint a privacy officer, eg adding privacy duties to a trusted employee’s existing role.
If you have any questions or need any more information, please get in touch with us.
From the team at JMA, see you all in 2021.