Global PEO Services (GPS) helps companies hire employees in New Zealand without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in New Zealand, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with New Zealand labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in New Zealand. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
New Zealand - Country Overview
New Zealand is one of the most prosperous countries in the Asia-Pacific region with a sizable service sector that contributes nearly 65% to the GDP. The country’s major manufacturing industries include food processing, aluminum production, metal fabrication, and wood/paper products. The government’s strong commitment to economic freedom has resulted in openness to global trade. Other major strengths of the country’s economy include a high level of monetary stability, sound management of public finance, and strong protection of property rights.
New Zealand Dollar
English, Maori, New Zealand Sign Language
Constitutional Monarchy with a Parliamentary System of Government
Auckland, Christchurch, Hamilton, Dunedin
Employment Contracts in New Zealand
There are two categories of employment agreements in New Zealand under the Employment Relations Act 2000, namely individual and collective. All agreements (individual or collective) must include the following details:
- Information related to an employee’s entitlements under the Holidays Act 2003
- The employees’ protection provision stating how workers will be affected in case of restructuring
- Entitlement to 1.5 times the regular pay for work done on a public holiday
- Work-related problem resolution process.
Working Hours in New Zealand
The regular work schedule comprises 40 hours and 5 working days in a week unless negotiated otherwise in the employment agreement. Amendments made to the Employment Relations Act in 2015 have made the requirements of rest periods more practical for employers. Employers can do away with breaks if their situation makes it implausible to give breaks or employees receive adequate compensation.
It is not mandatory to provide overtime pay but it must be if specified in employment agreements. Employers and employees can agree on the hourly overtime rates for any work done beyond the regular weekly work schedule of 40 hours.
Employee Leave in New Zealand
The following national holidays are observed in New Zealand:
- Jan. 1-2: New Year’s
- Feb. 6: Waitangi Day
- April 25: ANZAC Day
- Good Friday and Easter Monday
- Queen’s Birthday (first Monday in June)
- Labor Day (fourth Monday in October)
- Dec. 25: Christmas Day
- Dec. 26: Boxing Day
- Provincial Anniversary Day (date determined locally)
If Waitangi Day, Christmas, Boxing Day, New Years’ Day, ANZAC Day, and Jan. 2 falls on a Saturday or Sunday, they are observed on the following workday.
Employees are entitled to 4 weeks’ leave in a year. The leave can be taken at the time agreed between the employee and the employer. Employees can take 2 consecutive weeks of leave out of the 4 weeks.
Under the Holidays Act 2003, employees are entitled to 5 days’ sick leave in a year after 6 months of employment. Unused sick leave can be accrued for up to 20 days, and it is not mandatory to pay compensation upon termination of employment. In case an employee receives Accident Compensation Corporation (ACC) or workers’ compensation payments for more than 5 days, both employers and employees are allowed to increase the ACC payment from 80% to 100% by reducing 1 day from employees’ sick leave balance.
Women employees, under the Parental Leave and Employment Protection Act 1987, are entitled to 52 weeks’ maternity leave. To qualify, employees must have worked an average of 10 hours in a week or 40 hours in a month.
Spouses or partners of employees having a baby are entitled to 52 weeks’ paternity leave. Mostly, employees are entitled to return to their positions at the end of the parental leave. Employers may prefer employees who hold key positions for similar jobs after 6 months. However, reinstating in the earlier position cannot be guaranteed.
- Parental Leave
The government pays a maximum of NZ$527.72 per week as parental leave benefit for up to 18 weeks.
- Carers’ Leave
Spouses or partners who take the responsibility of nursing or caring a child aged less than 6 years with an intention to adopt are entitled to same parental leave benefits as biological mothers.
- Bereavement Leave
Employees are entitled to 3 days’ bereavement leave upon the death of a close family member including their parents, spouses, children, grandparents, mother or father-in-law. In case of more than 1 death, employees are entitled to an additional 3 days’ bereavement leave in a month.
- Volunteer Defense Force Leave
Employees who volunteer in the armed forces are entitled to unpaid leave for training under the Volunteers Employment Protection Act 1973. Employers are required to hold the positions for up to 12 months for employees who volunteer or are called upon a situation of national interest.
Employee Benefits in New Zealand
Pension and Social Security
The normal retirement age is 65 years for individuals who have lived in New Zealand for a minimum 10 years since the age of 20 years or 5 years since the age of 50 years. A work-based savings initiative called KiwiSaver requires employees to make contributions equal to 3% of their pay and employers are required to make contributions equal to at least 3% of employees’ wages.
A 3-pillar pension system comprises:
1st Pillar: The New Zealand Superannuation, a non-contributory state pension
2nd Pillar: KiwiSaver scheme
3rd Pillar: Private pension savings
The New Zealand Superannuation (NZS) provides social protection in the form of a flat-rate pension to all residents who have lived in New Zealand for a minimum 10 years since the age of 20 or 5 years since the age of 50. This pension is financed using general tax revenues.
The KiwiSaver scheme came into effect in July 2007 in addition to the private sector superannuation schemes to complement the pension schemes available to the 2nd pillar pensioners. New employees get enrolled automatically and can opt out within 8 weeks. Occupational pensions are provided via superannuation schemes on a stand-alone basis or as a part of a master trust.
Accident Compensation Insurance, provided by the Accident Compensation Corporation (ACC), offers coverage for both workplace and non-workplace injuries suffered by both residents and visitors to New Zealand. In case an individual is rendered incapable to earn a living, ACC pays weekly compensation up to a maximum 80% of previous wages.