Employer not making Kiwisaver contributions

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Forums › Finance and wealth management › Employer not making Kiwisaver contributions

nickb800

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#141029 27-Feb-2014 15:42

Just reviewing my employment contract before I renew it, and I noticed a clause under remuneration "...if you join or are a member of Kiwisaver or NZUSS, the cost of the employer contribution will be deducted from your hourly rate in addition to the cost of the employee contribution". I have discussed this with HR and they have confirmed that (in my case) my net income will be less my employee contribution (8%) and the employer contribution (3%) - apparently because I do not fall under their collective agreement the employer contributes nothing.

This isn't really my field of expertise, but I thought the employer contributions were compulsory so am a bit miffed as to how they can get around this. Aren't they breaking the law?

Not looking for general comments about kiwisaver or the concept of employer contributions, I understand the economics of this at a macro scale, or that 3% isn't a big amount of money.

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#995572 27-Feb-2014 15:47

They aren't breaking the law no. When Labour introduced Kiwisaver, they wrote into the law that an employer could not discriminate against a Kiwisaver member by paying them less than another employee not in Kiwisaver. However the National Government, as part of its commitment to screwing the working class, removed this clause, allowing employers to incentivise not being a Kiwisaver member by paying more to non-members.

johnr

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#995573 27-Feb-2014 15:48

Just WOW really how can they do this?

ubergeeknz

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Vocus

#995574 27-Feb-2014 15:49

I did not know this. Wow that's messed up.

nickb800

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#995577 27-Feb-2014 15:57

Talked to IRD, turns out that it is allowed.

I could understand if the advertised wage rate specifically mentioned this situation, but not in my case, only found out in the contract.

I guess National really did gut Kiwisaver

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#995579 27-Feb-2014 15:58

I am amazed this can be done,

freitasm

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#995581 27-Feb-2014 16:00

While this is "legal", is it "ethical" or "moral"?

What kind of screwed up workplace is this?

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nickb800

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#995583 27-Feb-2014 16:03

A reasonably large university

Klipspringer

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#995586 27-Feb-2014 16:07

nickb800: Just reviewing my employment contract before I renew it, and I noticed a clause under remuneration "...if you join or are a member of Kiwisaver or NZUSS, the cost of the employer contribution will be deducted from your hourly rate in addition to the cost of the employee contribution". I have discussed this with HR and they have confirmed that (in my case) my net income will be less my employee contribution (8%) and the employer contribution (3%) - apparently because I do not fall under their collective agreement the employer contributes nothing.

This isn't really my field of expertise, but I thought the employer contributions were compulsory so am a bit miffed as to how they can get around this. Aren't they breaking the law?

Not looking for general comments about kiwisaver or the concept of employer contributions, I understand the economics of this at a macro scale, or that 3% isn't a big amount of money.

I'm guessing you a contractor because you talking about an hourly rate? Ie. Not permanently employed?

Form my experience this is pretty standard these days with contractors.

nickb800

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#995588 27-Feb-2014 16:12

Klipspringer:
nickb800: Just reviewing my employment contract before I renew it, and I noticed a clause under remuneration "...if you join or are a member of Kiwisaver or NZUSS, the cost of the employer contribution will be deducted from your hourly rate in addition to the cost of the employee contribution". I have discussed this with HR and they have confirmed that (in my case) my net income will be less my employee contribution (8%) and the employer contribution (3%) - apparently because I do not fall under their collective agreement the employer contributes nothing.

This isn't really my field of expertise, but I thought the employer contributions were compulsory so am a bit miffed as to how they can get around this. Aren't they breaking the law?

Not looking for general comments about kiwisaver or the concept of employer contributions, I understand the economics of this at a macro scale, or that 3% isn't a big amount of money.

I'm guessing you a contractor because you talking about an hourly rate? Ie. Not permanently employed?

Form my experience this is pretty standard these days with contractors.

Correct, fixed term on an hourly rate. Obviously I don't expect all the perks of a salaried employee as a contractor, but this...

Kyanar

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#995609 27-Feb-2014 16:34

If you're curious, refer to the Employment Relations Amendment Act 2008 - the same one that also added the 90 Day Trial rule.

Geektastic

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#995614 27-Feb-2014 16:40

nickb800:
Klipspringer:
nickb800: Just reviewing my employment contract before I renew it, and I noticed a clause under remuneration "...if you join or are a member of Kiwisaver or NZUSS, the cost of the employer contribution will be deducted from your hourly rate in addition to the cost of the employee contribution". I have discussed this with HR and they have confirmed that (in my case) my net income will be less my employee contribution (8%) and the employer contribution (3%) - apparently because I do not fall under their collective agreement the employer contributes nothing.

This isn't really my field of expertise, but I thought the employer contributions were compulsory so am a bit miffed as to how they can get around this. Aren't they breaking the law?

Not looking for general comments about kiwisaver or the concept of employer contributions, I understand the economics of this at a macro scale, or that 3% isn't a big amount of money.

I'm guessing you a contractor because you talking about an hourly rate? Ie. Not permanently employed?

Form my experience this is pretty standard these days with contractors.

Correct, fixed term on an hourly rate. Obviously I don't expect all the perks of a salaried employee as a contractor, but this...

My wife works hourly rate fixed term and gets zero KS or holiday pay.

There is however a strange muddiness in NZ with what is a fixed term.

IMV a fixed term contract is ANY contract that is not an indefinite contract of permanent employment. i.e. any contract that last say 6 months or 12 months is a fixed term contract.

There is a strange fixed term contract however which treats you like a full employee but only for a fixed term (in which you usually get holiday pay, KS etc) and another kind (usually hourly or day rate) which is also fixed term but not THAT kind of fixed term.

It's a bit like the Wild West being employed here IME.

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Geektastic

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#995615 27-Feb-2014 16:42

nickb800:
Klipspringer:
nickb800: Just reviewing my employment contract before I renew it, and I noticed a clause under remuneration "...if you join or are a member of Kiwisaver or NZUSS, the cost of the employer contribution will be deducted from your hourly rate in addition to the cost of the employee contribution". I have discussed this with HR and they have confirmed that (in my case) my net income will be less my employee contribution (8%) and the employer contribution (3%) - apparently because I do not fall under their collective agreement the employer contributes nothing.

This isn't really my field of expertise, but I thought the employer contributions were compulsory so am a bit miffed as to how they can get around this. Aren't they breaking the law?

Not looking for general comments about kiwisaver or the concept of employer contributions, I understand the economics of this at a macro scale, or that 3% isn't a big amount of money.

I'm guessing you a contractor because you talking about an hourly rate? Ie. Not permanently employed?

Form my experience this is pretty standard these days with contractors.

Correct, fixed term on an hourly rate. Obviously I don't expect all the perks of a salaried employee as a contractor, but this...

Just cross it out and return the signed copy. If they don't query the amendment then they would be deemed to have accepted it I would say.

jeffnz

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#995663 27-Feb-2014 17:50

really its all smoke and mirrors as employers just lowered any increases they were going to make when Kiwisaver came in so any contribution was included in new rates after that, those that don't have KS are basically missing out.

Good to see its Nationals fault, again, and our 'National' pass time of finding someone to blame is at least consistent. Vote Labour so we can go socialist and have state control of everything so blaming and relying on others is easier. :)

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jeffnz

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#995677 27-Feb-2014 17:56

Kyanar: They aren't breaking the law no. When Labour introduced Kiwisaver, they wrote into the law that an employer could not discriminate against a Kiwisaver member by paying them less than another employee not in Kiwisaver. However the National Government, as part of its commitment to screwing the working class, removed this clause, allowing employers to incentivise not being a Kiwisaver member by paying more to non-members.

This is just rubbish and shows you have an axe to grind, any employment contract I have been involved in certainly does't change if people decide to opt out or in of KS.

If you know of employers doing this I would suggest you find someone else to work.

There are always bad employers regardless of what governments do and if you really read and understood the original ECA National put in place (and Labour changed very little of) you would know that it gives employees more power in a healthy economy. Paying all employee's the same regardless of how much work they do is just bad business, productivity increases and pay will follow, if you owned a business how would you handle just paying people more each year for doing the same?, I'm guessing if you did you would just pass the cost on or go bust.

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Mattnzl

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#995706 27-Feb-2014 18:20

This is actually quite common. I'm in the same boat as are a lot of people I talk too. "Total Remuneration" is the speal emloyers use to get around this.
My 3% "Employer" contribution comes out of my salary, same for everyone else in our company of 1000+ staff.

The only time an employer can't do this, is for staff on minimum wage, as taking the 3% out would put them below minimun wage (recent court case I think).

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