Employer of Record Guide in 

New Zealand

Annual Leave

• Entitlement: Minimum 4 weeks (20 working days) per year after 12 months of employment
• Accrual: Begins from first day of employment
• Payment: At least 8% of gross earnings over the 12-month period
• Cash-up: Maximum 1 week per year can be cashed up (with agreement)

Sick Leave

• Entitlement: 10 days per year after 6 months of employment
• Accrual: Begins immediately, available after 6 months
• Unused Leave: Can accumulate up to 20 days
• Evidence: Medical certificate may be required after 3+ consecutive days

Bereavement Leave

• Entitlement: 3 days paid leave for death of spouse, parent, child, sibling, grandparent, grandchild, or spouse's parent
• Additional: Up to 1 day for funeral attendance of other relatives/friends
• Timing: Must be taken within 2 months of death or funeral

Parental Leave

Maternity Leave:

• 18 weeks paid (up to $712.17 per week before tax)
• Additional 8 weeks unpaid
• Available after 6 months employment

Partner's Leave:

• 2 weeks paid partner's leave
• Can be taken within 21 days of birth/adoption

Parental Leave:

• Up to 52 weeks total (including maternity leave)
• Can be shared between partners
• Job protection guaranteed

Public Holiday Leave

When employees work on a public holiday:

• Time-and-a-half plus a day in lieu (if it's an otherwise working day)
• Alternative holiday if the public holiday falls on a day they would normally work

Family Violence Leave

• Entitlement: 10 days per year (available immediately)
• Purpose: For employees affected by domestic violence
• Flexibility: Can be taken as full days, half days, or hours

Summary

Termination Types

Dismissal for Serious Misconduct:

• No notice required
• Must be serious enough to justify instant dismissal
• Examples: theft, serious safety breaches, serious insubordination

Dismissal for Other Reasons:

• Notice period required
• Must follow fair process
• Reasons can include performance, redundancy, or incapacity

Notice Period Requirements

Notice periods are not statutorily mandated but are typically specified in employment agreements:

Note: Notice periods should be clearly specified in the employment agreement.

Fair Process Requirements

All dismissals (except serious misconduct) must follow a fair process:

1. Investigation: Gather relevant information
2. Put allegations: Give employee opportunity to respond
3. Consider response: Genuinely consider employee's explanation
4. Decision: Make decision based on investigation
5. Appeal: Offer right of appeal

Redundancy

Genuine Redundancy Requirements:

• Position no longer required
• Consultation with affected employees
• Consider redeployment options
• Fair selection process if multiple employees affected

Compensation:

• Notice period as per contract
• No statutory redundancy pay (unless specified in agreement)

Trial Periods

• Maximum 90 days for new employees
• Must be agreed in writing before employment starts
• Employer can dismiss without usual process requirements
• Employee cannot bring personal grievance for unjustified dismissal

Final Pay Requirements

Final pay must include:

• Outstanding wages
• Accrued annual leave
• Any other entitlements
• Must be paid by next normal pay day

National Public Holidays

New Zealand has 11 national public holidays:

Regional Holidays

Each region has one additional anniversary day holiday:

• Auckland: January 29, 2024
• Wellington: January 22, 2024
• Canterbury: November 15, 2024
• Otago: March 25, 2024

Note: Anniversary days vary by region and may be observed on different dates.

Mondayisation

When a public holiday falls on a weekend:

• Saturday holidays: Observed on the following Monday
• Sunday holidays: Observed on the following Tuesday

Holiday Pay Calculation

For public holidays, eligible employees receive:

• Time-and-a-half for hours worked
• Alternative holiday if they would normally work that day
• Relevant daily pay if they don't work

Required Documents for Employment

Employment Agreement:

• Must be in writing
• Include key terms: duties, location, hours, wages, leave entitlements
• Signed before work begins or within first month

Tax Documents:

• IR330 Tax Code Declaration: For PAYE tax deductions
• IRD Number: New Zealand tax number (if employee doesn't have one)

Identification:

• Work Visa: For non-residents
• Photo ID: Driver's licence or passport
• Bank Account Details: For wage payments

Work Authorisation

New Zealand Citizens/Residents:

• No work restrictions
• Can work for any employer

Visa Holders:

• Must have valid work visa
• Some visas have employer or occupation restrictions
• Employer must check visa conditions

Privacy and Data Protection

Under the Privacy Act 2020:

• Only collect information necessary for employment
• Inform employees how information will be used
• Ensure information is accurate and secure
• Allow employees to access their information

Health and Safety

Health and Safety at Work Act 2015:

• Employer must ensure workplace safety
• Provide information, training, and supervision
• Consult with workers on safety matters
• Report serious incidents to WorkSafe

Probationary Periods

Trial Periods:

• Maximum 90 days for employees new to the business
• Must be agreed in writing before employment starts
• Different rules apply than standard employment

Probationary Periods:

• Can be longer than 90 days
• Standard employment protections apply
• Must follow fair process for any dismissal

Onboarding Timeline

What the EOR Handles

Borderless AI will handle:

• Employment agreement preparation
• Tax registration and compliance
• ACC registration and levy payments
• Health and safety compliance
• Payroll processing and reporting

Worker Classification: Employee vs Contractor

New Zealand law focuses on the real nature of the working relationship, not just the contract terms.

Employee Indicators:

• Works under direction and control
• Integrated into the business
• Works set hours at set location
• Uses employer's equipment
• Receives regular wages

Contractor Indicators:

• Controls how work is done
• Provides own equipment
• Bears financial risk
• Invoices for work
• Works for multiple clients

Note: Misclassification can result in penalties, back payments, and legal liability.

Collective Bargaining and Unions

Union Rights:

• Employees can join unions
• Unions can negotiate collective agreements
• Employers must recognise union representatives

Good Faith:

• All employment relationships must be conducted in good faith
• Includes being responsive, communicative, and not misleading

Cultural Considerations

Māori Culture:

• Respect for Māori customs and values
• Te reo Māori (Māori language) increasingly used in workplaces
• Cultural sensitivity important

Work-Life Balance:

• Strong emphasis on work-life balance
• Flexible working arrangements common
• "She'll be right" attitude - pragmatic approach to problem-solving

Flexible Working

Right to Request:

• Employees can request flexible working after 6 months
• Employer must consider request and respond within 3 months
• Can only refuse on genuine business grounds

Types of Flexibility:

• Flexible hours
• Compressed work weeks
• Remote working
• Job sharing

Anti-Discrimination Laws

Human Rights Act 1993 prohibits discrimination based on:

• Sex, race, age, disability
• Religious or ethical beliefs
• Sexual orientation
• Family status
• Employment status

Equal Pay:

• Equal pay for equal work
• Pay equity legislation for female-dominated roles