[EMPLOYMENT NZ] MODIFYING EMPLOYMENT AGREEMENTS DURING COVID-19 RESPONSE AND RECOVERY
Find out about options to deal with the impacts of COVID-19 in the workplace.
Changes to the rate of pay
Agreeing to a lower rate of pay for each hour that the employee works
An employer can’t change an employee’s rate of pay without discussing it in good faith and the employee’s agreement. In some situations, (such as genuine financial, commercial or economic problems, or genuine restructuring of the business), reducing an employee’s rate of pay may be put forward as an alternative to redundancy. The length of time for this change must be stated in writing in the employment agreement variation.
In these situations, the employer must follow the usual process for workplace change, which includes giving the employee a fair opportunity to consider and respond to the proposed change.
During all Alert Levels, businesses are legally required to pay workers for any work they do and must continue to meet all contractual obligations. This means employees – regardless of whether they are working from home, or from their workplace – must be paid at least the minimum wage, or more if the rate in their employment agreement is higher.
If an employee is working (either from home, or at a workplace), then they must be paid for each and every hour that they work at their agreed wage rate. This rate cannot be below the minimum wage rate.
Any agreed changes must be recorded in writing and signed by both parties, and the employee must be given reasonable time to consider the proposal.
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Penny Varley
Payroll Administrator