EMAIL NEWSLETTER
AUGUST 2008
Welcome
again to the McLean
and Co. Newsletter
in which we discuss current taxation and business matters. We trust
you find it informative.
We
are happy to accept new clients. We would be happy to assist colleagues
and acquaintances as new clients.
INDEX
-
Managing
Financial Difficulty and Debt
-
Hiring Staff
-
Annual Holidays
MANAGING FINANCIAL DIFFICULTY AND DEBT
If you think you will have difficulty meeting any of your tax
obligations it is important that you contact IRD to discuss your situation as
penalties may apply if you do not pay on time.
If we have asked you to file a return and you have not yet done so, we
will estimate the amount of tax we think you owe. This is called a
"default assessment". You may also be charged a late filing penalty.
It is important that you file the overdue return so that your correct tax
position can be confirmed. You may even be entitled to a refund.
There are a range of options available for paying amounts due. If you
are unable to pay the full amount on time, please contact us as soon as
possible. You do not have to wait until the due date for payment has passed.
If you think you may have difficulty meeting your loan obligations
please get in touch with us. We will look at your specific situation and try
to come up with a solution that is in your best interest.
The best way to avoid debt is to pay the full amount you owe, on time,
every month. But if you get behind in your payments or think you are going to
have trouble paying on time, please contact us.
If you know that you will not be able to pay your tax on time or if you
currently have debt outstanding, there are a number of options available to
you. Learn also about the penalties and interest that may apply for failing to
meet tax obligations.
HIRING STAFF
If you are thinking of taking on new staff, or
replacing staff who are leaving, this very comprehensive check-list from the
Department of Labour will help guide you through the process
There are three steps in the hiring
process
1. Describing and advertising the job.
2. Reviewing applications through to the interview.
3. Selecting and appointing.
1:
Describing and Advertising the Job
To enable to get the best person for the position
both you and the applicant need to have a clear idea of:
- The job to be done.
- The hours of work.
- The personal attributes, skills and
qualifications expected.
- The training and development you will be
providing.
If it is the first time you are
filling the position, this is the time to consider the needs and direction of
your business. If you are replacing an exiting employee then it is also
worthwhile to review the present job description to make certain it fits in
with your needs.
A job description
should:
- Identify your business and its priorities.
- Be written at a level appropriate to the position
you are filling.
- Clearly identify the core tasks and
responsibilities.
- Describe the lines of responsibilities of the job–both
who the person is responsible to and (if appropriate) who reports to them.
- Spell out any minimum legal or educational
requirements.
- Set out your performance measures for the job.
Attracting
suitable Job Applicants
How you attract the best applicant for the job depends on the job, how much
you are able to spend on advertising, and how much time you have.
When you prepare and publish an advertisement, you retain responsibility for
what is said, and you need to make sure that what is said is accurate and not
discriminatory.
2:
Receiving Applications Through to Interviewing
Application Forms:
It may take time to provide and deal with an application form, however there
are a number of advantages. To highlight a few:
- It provides you with the information you
require for your selection.
- It provides an opportunity for the applicant to
indicate how and where they wish to be contacted.
- The form can include a section for the applicant
to sign to authorise you to contact referees and where it is a requirement
of the job, to conduct a security check to ascertain whether the employee
has any criminal convictions.
- It can be used to obtain details of the applicant’s
residency status and, where appropriate, the nature of work permits.
- The form can include a declaration for the
employee to sign, acknowledging that they have provided all the
information relevant to the job and have not withheld any significant
information.
Confidentiality
Disclosing details of an applicant even by accident, is likely to be a breach
of the Privacy Act and may ruin the relationship with a potential employee.
More detailed information is available on www.
privacy.org.nz.
It is also good practice to consider the following:
- A letter of receipt (confirming that you
have received the application and advising what the next step in the
process will be).
Setting times and places for the interview.
- Deciding what type of interview is best.
- Deciding the information you need.
- Understanding the information that the applicant
may need.
- Assessment tasks.
- Contacting referees and making independent
inquiries.
Contacting Referees
and making Independent Enquiries
It is often crucial to follow up referees and make independent inquiries, such
inquiries can provide invaluable information and can also be used to test your
assessment of an applicant.
- Under the Privacy Act it is advisable to
specifically obtain the applicant’s consent, preferably in writing, to
your obtaining information from referees or other sources and the uses to
which the information is put. A straight-forward way to obtain this is in
an application form that each applicant can fill out and sign.
- Other requirements of the Privacy Act that also
need to be complied with include ensuring that the collection of the
information does not intrude unreasonably on the applicant’s personal
affairs.
- Care needs to be taken with pre-employment health
screening. For instance, the collection of this information for the
purposes of discriminating against applicants with a disability, where the
relevant exception in the Human Rights Act does not apply, would be
unlawful. Seeking information that is not relevant to the proper and safe
performance of a job could also be in breach of the Privacy Act.
- Consider whether this is a job where checking
prior convictions is appropriate.
- Consider the procedures and timescales of
industry registration bodies, where certification or registration is a
requirement of the position.
- When obtaining a reference, ask yourself what
information is important and relevant. Prepare for each referee and as
with interviews ask concise but open-ended questions that require the
referee to exercise judgement, rather than say, Yes” or “No”.
Employment
Agreements
There are minimum legal rights that apply which neither you nor your employee
can agree to reduce. Once you have met those requirements the range of payment
or conditions you are likely to be driven by:
- The profitability of your business.
- The provisions other similar employers are
offering.
- The special circumstances in your region.
- The availability of the skills in the industry.
- The policy on retention and development of
employees.
- The Department of Labour employment agreement
builder can help you consider the broad range and cost of an individual
employment agreement to the successful applicant. It is available on http://www.ers.govt.nz/relationships/builder/index.asp
3:
Selecting and Appointing
Making the Selection decision:
Selecting the most suitable
applicant involves ranking each applicant against the needs of the job and the
personal attributes you originally identified.
Be careful that any ranking system you
use is fair. Avoid considerations that amount to unlawful discrimination under
the Human Rights Act. Information on the Act is available at www.hrc.co.nz.
When to make
a Decision
It is not advisable to make a snap decision about offering an applicant a job
during the course of an interview. Taking time to compare the applicants will
lead to better decisions.
When you make a selection decision
remember that if a challenge is later taken by an unsuccessful candidate (for
example on the grounds of discrimination), documentation relevant to the
appointment process and decision may have to be disclosed.
Deciding to
Appoint
Remember, you are not compelled to actually make an
appointment. If the applications are not of a suitable standard, or if
circumstances change during the recruitment process and you do not now need a
new employee, you can simply decide not to offer any of the applicants a job.
Making an Offer
When you have decided on your preferred candidate, the next step is to
formally offer them the position and also offer them an employment agreement.
In order to do this you must:
Provide the job applicant with a written copy of the proposed employment
agreement. Advise the employee that they are entitled to seek independent
advice about the agreement and its terms; are invited to respond to the
proposed agreement; have a reasonable opportunity to seek that advice. (What
is reasonable will depend on the circumstances. It can be helpful to agree
with the employee in advance how long they anticipate they would need in order
to take advice).
Conditions in
Individual Employment Agreement
When an individual employment agreement is to be offered, it must be in
writing. This ensures that there is a clear understanding of the terms and
conditions on which the employment agreement has been offered, and can help to
prevent later disputes. The employment agreement builder can guide you through
the developing your employment agreement [see http://www.ers.govt.nz/relationships/builder/index.asp]
Individual employment agreements are
required to contain the following core terms:
- The names of the parties.
- A description of the work to be performed.
- An indication of the place of work and hours of
work.
- The wages or salary payable.
- The right of the employee to receive at least
time and half if they work on a public holiday .
- A plain-language clause explaining the
services available for resolving employment relationship problems.
For most employees there must also be
a clause covering the rights of the employee on the sale or transfer of the
business, or if work is contracted out.
Some employees undertaking work such
as cleaning and food catering have different rights in this area. Information
on those employees and their rights can be obtained by phoning 0800 20 90 20
or visiting http://www.ers.govt.nz/factsheets/specified-groups-restructuring-employees.html
You are also required to tell the
employee about their rights under the Holidays Act. This requirement can be
met by including these in the employment agreement. It is important that these
rights can be clearly understood by the employee. The employment agreement
guide includes examples of terms of employment that are typically dealt with
in an agreement [ see http://www.ers.govt.nz/relationships/builder/guide.asp]
It is important to ensure that the
agreement records all the agreed benefits that the employee will be entitled
to. If any assurances were given in the interview stage, then it is also wise
to clearly record those assurances in the written agreement.
Offers and
Employment Agreements for Part-time and Casual Jobs
The process of offer and consideration of employment agreements for part-time
jobs has to comply with the same requirements that apply to full-time
employment. The obligations on employers that are discussed above apply.
Casual employees generally have the similar minimum employment rights as other
employees. More details can be obtained by phoning 0800 90 20 90 or by
visiting http://www.dol.govt.nz
Offers and
Employment Agreements for Fixed-term Employees
The process and consideration of employment agreements for fixed term jobs has
to comply with the same requirements as permanent employment. Fixed- term
employees generally have similar minimum employment rights other employees.
For more information on the requirements of a fixed-term agreement go to http://www.ers.govt.nz/relationships/fixed.html#examples
Failure to comply with the
requirements relating to fixed-term agreements could affect your ability to
end the employment at the expiry of the fixed term, by entitling the employee
to treat the employment as continuing.
Offers and
Employment Agreements for Probationary Periods
The process of offer and consideration of employment agreements has to comply
with the requirements for full time employment when you are offering someone a
position involving a probationary period. Employees during and at the
termination of their probationary period have similar minimum employment
rights as full time employees.
For information on the requirements of
probationary periods refer to http://www.ers.govt.nz/relationships/fixed.html#examples
Avoiding a
Claim of Unfair Bargaining
The Act seeks to ensure that new employees have the opportunity to discuss and
agree their proposed terms of employment in good faith environment.
An employee can take a claim against you if the bargaining that occurred over
the terms of their individual employment agreement was unfair. Unfair
bargaining is defined as including situations where the employee:
- Was unable to understand what the agreement says
or means because of a diminished capacity caused by, for example, age,
sickness, mental or educational disability, a disability relating to
communication or emotional distress.
- Reasonably relied on your skill, care or advice,
or that of your representative.
- Was induced to enter the agreement by oppressive
means, duress or undue influence.
- Was not given a reasonable opportunity to seek
independent advice about the agreement before entering into it.
- Maintaining a good record of the offer and
acceptance, including correspondence and draft agreements can assist you
in responding to an employee’s claim, should one occur.
If you require more detailed
information on the hiring process refer to http://www.ers.govt.nz/publications/pamphlet_order_form.asp
to order a copy of the How to Hire Guide or see http://www.ers.govt.nz/publications/pdfs/hiring_guide.pdf
to view an electronic copy.
ANNUAL HOLIDAYS
Under the Holidays Act 2003 all employees are entitled to a minimum
of four weeks annual holidays.
This section has information on how to calculate annual holiday
entitlements and pay, and how the transition from three to four weeks
annual holidays works.
The information provided in this email newsletter is for
informational purposes only. McLean and Co. accept no
responsibility for the opinions and information expressed in the
information provided and it is provided "as is" without
warranty of any kind. The user assumes the entire risk
as to the accuracy and use of this document. Readers are
asked to seek professional advice pertaining to their own
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