Hiring staff is a major part of any establishment. Let’s face it , your people make the place, not only because of their skills, but their personalities shine through and give your restaurant, bar, café or hotel its own personality and that’s what keeps customers returning. The best way to secure good professional staff is with a professional approach to your employment obligations.
So what are your obligations as an employer?
Well there are many, legal, social and moral responsibilities placed on an employer that at times you can feel like the parent, police officer, school teacher, friend and general punching bag and its easy to loose sight of the fundamentals. Some of the most common areas in which employers slip up are:
Calculations and Record Keeping:
The most difficult area for hospitality operators to keep on top of is paperwork and staff payroll calculations and record keeping is no exception. This is hardly surprising given that the majority of small to medium sized operators still use manual payroll systems. Calculating employee PAYE and deductions the myriad of other deductions such as student loans, Kiwisaver contributions, child support and WINZ deductions, payroll giving and donations, ACC and more can be very complex. On top of this employers need to keep track of the hours worked by each employee, plus any overtime entitlements and holidays accrued not forgetting that all this information needs to be kept for the statutory 6 year period as required by IRD.
The good news is that there are many affordable solutions at available these days. Particularly exciting are the latest “cloud based” accounting systems like Xero that allow you to access your data securely from any computer with an internet connection. Other systems like Flexitime systems even include rostering and timesheets and allow employees to logon and check their wages, holiday entitlements, apply for leave etc. These systems are surprisingly affordable and can make an employers life so much easier by alleviating much of the stress and time involved in administrative tasks.
A provision of the Employment Relations Act 2010 which comes into effect from 1 July 2011 is that employers are required to retain a signed copy of individual’s employment agreement or current signed copy of the terms and conditions of employment. Apart from the obvious mandatory things such as the parties involved, the position and duties, the nature and term of the agreement, the place of work, the hours of work and wages, salary and allowances – you also need to include things like the obligation of the relationship, holiday and leave entitlements and benefits, plus health and safety, restructuring and redundancy, termination of employment, resolving employment relationship problems, acknowledgements and declarations. You may never need to use these clauses, but having them there is like insurance – you are covered if things go wrong.
Drafting a basic employment contract is quite simple with the help of the Department of Labours free online Employment Agreement Builder available on their website – www.dol.govt.nz. It goes through all the statutory requirements and gives you the ability to tailor the agreement to suit your needs.
Handling Disciplinary Action Correctly
There are so many legal requirements and obligations placed on employers these days that it can feel quite overwhelming and a small deviation from the law can end up costing you. An example of this is a Café owner who after giving 3 formal warnings to one of his chefs for a serious “offence”, caught the chef committing the same “offense” again. He notified the chef of the need for a disciplinary meeting, set up a time for the following day and advised the Chef that the outcome of the meeting may be dismissal. Following the meeting which did result in the employees dismissal, the Chef engaged and employment lawyer whose opinion was that while the dismissal has been justified the proper procedure had not been followed as the employer had not been given the chef the option of bring a support person to the meeting that resulted in his dismissal. After taking legal advice himself the Café owner landed up paying a hefty settlement sum to the Chef rather than take the matter to employment court. The lesson to learn form this is that employment law is a potential minefield for those who are not experienced in the area so before taking any action employers should always seek expert advice.
Declaring Fringe Benefits
IRD is making no secret of the fact that they are targeting the hospitality industry this year in an attempt to put an end to the “hidden economy” which includes under the table transactions that are never declared. Many employers may not be aware of the fact the providing benefits to staff such as on the job meals or allowing them to take home left overs that otherwise would go to waste should be declared and fringe benefit tax paid by the employer. As part of IRD’s investigations they can interview staff to find out if meals are provided to them while at work – this could mean trouble for you if your staff answer yes but you have not declared it.
Providing a safe workplace
As an employer you must take ‘all practicable steps’ to ensure the safety of your employees while they are at work. As a minimum requirement Hospitality operators should have fire evacuation and emergency management plan in place, a hazard management system to identify and manage any potential risks and they should ensure that the staff is adequately trained in safe operating procedures. You should also ensure that you have first aid kits readily available and have at least one member of staff on duty with a current first Aid Certificate.
Ensuring your staff are legally permitted to work in NZ
As of 29th November 2010 the changes to the Immigration Act have placed more responsibility on employers to ascertain whether or not their staff are legally permitted to work in New Zealand. Employers now need to show that they have taken ‘reasonable precautions’ and ‘exercised due diligence’ in checking whether foreign nationals are entitled to work for them. Having an IR330 form signed by the employee is no longer considered a ‘reasonable excuse’. There is a penalty of up to $10,000 for employing foreign nationals who are not permitted to work in NZ and a fine of up to $50,000 for continuing to employ them once you are aware of the fact that they are working illegally.
Employers should request to see prospective new employees Passport and Work Permit / Visa and retain a copy of this on file or you could register as an employer on Immigration NZ’s new system that currently being trialed called “Visaview” where check the work permits and residency status of potential employees online.
Contact Hospitality Advice to find out more about your obligations as an employer.