New Zealand is a small Oceanic country with stunning natural beauty, a unique and diverse culture, and friendly, highly educated people, making it a great destination for companies looking to hire remote international workers.
However, hiring remote workers in New Zealand can pose certain challenges without the right support. When a company does not already have existing operations in New Zealand, it must work with a New Zealand-based Employer of Record (EOR) to ensure you are fully compliant with New Zealand’s complex labor and tax laws.
In this article, we will go over the role and responsibilities of an Employer of Record, the benefits of working with an EOR when hiring workers in New Zealand, how to hire international workers through an EOR, and more.
The Benefits and Challenges of Hiring Remote Employees in New Zealand
The COVID-19 pandemic made both employers and employees realize that they could still do their jobs, regardless of their location. Since then, the demand for remote workers has skyrocketed.
More and more workers are adopting a digital nomad lifestyle and are working from anywhere in the world. New Zealand in particular has become an incredibly popular destination for digital nomads, which means employers looking to hire these workers will need to navigate the country’s labor and tax laws and ensure they are compliant. This can be a significant obstacle for employers that don’t have an office in New Zealand.
An EOR is a great solution to this common challenge.
What is An Employer of Record?
An EOR is a third-party entity that acts as the legal employer for an employee or group of employees working for a company based outside of the country they reside in. Essentially, the EOR is your New Zealand staff’s employer on paper, enabling you to hire international workers without having to set up an official office.
The EOR is responsible for payroll, benefits, taxes, and other human resources functions. This includes ensuring compliance with employment laws and regulations, managing payroll and benefits, drafting contracts, and more. Meanwhile, the actual employer manages the day-to-day activities of its staff, manages communications, reviews and oversees their work, and hosts meetings.
The Benefits of Working With an EOR in New Zealand
Working with an EOR enables companies to quickly expand their workforce in New Zealand without the administrative burdens that come with setting up an office in a new country. As a result, employers are able to rapidly respond to market demands or opportunities and fill job vacancies.
New Zealand has complex and ever-changing employment laws, making it challenging for companies to stay up to date with all the legal requirements of employing staff in New Zealand. An EOR that has specialized knowledge when it comes to New Zealand employment laws and standard hiring practices will ensure that all necessary laws and regulations are met, reducing the risk of non-compliance.
Finally, an EOR also helps you save a lot of time and money, as setting up operations abroad can be an incredibly expensive and time-consuming process.
Areas an Employer of Record Can Help With
Below, we have listed some of the specific tasks an EOR will be responsible for.
Drafting Contracts and Legal Documents
The EOR will help manage the administrative tasks involved in hiring abroad, including collecting banking information and drafting employment contracts and any other required legal documentation.
Payroll Management
An EOR can manage all aspects of payroll, including calculating and processing employee wages, tax and social security contributions, and other payroll-related expenses.
In New Zealand, payroll deductions must be made for the following:
- PAYE (Pay As You Earn tax)
- Child support
- Student loan repayments
- KiwiSaver employee contributions
- KiwiSaver employer net contributions
- Employer superannuation contribution tax (ESCT).
Issuing Benefits
An EOR will help ensure your staff are receiving the benefits they are entitled to. In New Zealand, employees are entitled to the following benefits:
- Ten days of paid sick leave per year, after completing six months of continuous employment with an employer.
- Up to 26 weeks of paid parental leave.
- Paid bereavement leave in the event of the death of a family member, such as a spouse, parent, or child.
Borderless' EOR also provides medical, dental, life insurance, vision insurance, and retirement contributions.
Vacation and Public Holidays
New Zealand has 12 statutory holidays in each calendar year, which can be hard to keep up with when you are based in another country with an entirely different set of public holidays.
In New Zealand, the 12 public holidays are as follows:
- January 1: New Year’s Day
- January 2: Day after New Year's Day
- February 6: Waitangi Day
- March/ April: Good Friday
- March/ April: Easter Monday
- April 25: ANZAC Day
- June: Queen's Birthday
- October: Labour Day
- December 25: Christmas Day
- December 26: Boxing Day
- December 27: Day after Christmas Day
- December 31: New Year's Eve
If an employee is required to work on any of the above holidays, they must be paid at least time and a half.
New Zealand employees are entitled to four weeks of annual leave after working for an employer for at least 12 months. With an EOR in place, they will ensure your staff are receiving their vacation pay and are taking their allotted time off.
What an EOR Doesn’t Help With
An EOR takes care of the administrative, legal and HR-related responsibilities required when managing a team of employees in New Zealand.
An EOR is not responsible for any of the following responsibilities:
- Managing or overseeing day-to-day operations
- Onboarding and training employees
- Managing employee communications
- Assigning projects
- Hosting team meetings
- Overseeing employee progress
It will be your job as an employer to take care of the above responsibilities.
What to Look For in an EOR
When choosing an Employer of Record to take care of hiring and managing your staff in New Zealand, you should be considering the following factors:
Specialized and Local Knowledge
Some Employers of Record operate in many different countries, so it’s important to make sure that the one you are considering working with has a team of legal experts specific to the country you are looking to hire from.
Your EOR should also have a deep understanding of the employment laws and regulations in New Zealand and be able to ensure compliance with all applicable tax regulations and labor laws.
Easy-to-Use Online Solutions
Look for an EOR with an online platform that is user-friendly while still being powerful enough to offer numerous functions.
Services That Meet All Your Needs
An EOR should offer a full suite of services that meet all of your specific needs. Ask lots of questions and make sure the EOR you work with is able to meet all of your requirements and is equipped to handle complex requests.
A Strong Customer Support Team
When it comes to retaining top talent, ensuring they are being paid on time and important administrative tasks are being handled is crucial. Because your EOR will be handling these responsibilities, having 24/7 customer support is essential in the event that any issues arise.
Steps For Hiring and Managing Employees Through an EOR in New Zealand
When working with an EOR, the process of hiring and managing workers in New Zealand involves the following steps:
- Determine the staffing needs of your business
- Begin your recruitment efforts
- Conduct interviews and check references
- Find a reliable Employer of Record
- Have your EOR draft employment contracts
- Onboard and train your employee(s)
- Your EOR will register the new employee with the authorities
- Your EOR will set up payroll and handle other HR tasks
- EOR will consistently make sure you are compliant with New Zealand laws
- You focus on day-to-day operations and retention efforts
Why Borderless Should Be Your Top Choice When Seeking an Employer of Record
Working with an Employer of Record is a requirement for any business looking to hire workers in New Zealand without having an office there. However, not all EORs are equipped to handle your unique needs and requirements. Always look for an Employer of Record like Borderless that has experience hiring and managing workers in New Zealand and is well versed in the country’s complex laws and employment practices.
Borderless is an Employer of Record that is set up to help manage employees in over 170 countries, including New Zealand. Our platform is designed to help companies like yours grow their team and hire, pay, and manage Belgian workers while ensuring you are fully compliant with New Zealand’s tax and employment laws.
If your business is looking to hire workers in New Zealand and requires the services of an Employer of Record, contact our team at Borderless today to book a demo.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
