New ZealandFind out what you need to know about employment laws, regulations, and Employer of Record (EOR) in New Zealand.
Looking to hire in New Zealand? An EOR can help
Setting up shop in New Zealand? Employer of Record (EOR) services play a crucial role for businesses that want to expand into New Zealand without setting up an entity of their own.
An EOR acts as the legal employer for your New Zealand-based workers, onboarding local employees, administering payroll, and managing benefits and taxes – all in compliance with local employment laws.
With an EOR streamlining and automating global employee management, you can save yourself the headache of navigating international labor law and, instead, focus on what really matters.
How to hire in New Zealand
Step 1: Choose between creating an entity and using an EOR
When it comes to hiring employees in New Zealand, you have two options: 1) Setting up a local entity or 2) Using an EOR.
Setting up a local entity gives you more control over your operations in the long run, although it can be time-consuming, expensive, and complicated to set up and run. It involves registering your business with the government, appointing directors, and complying with complex tax regulations.
The process can take weeks or even months to complete, delaying your hiring plans in New Zealand. Additionally, setting up an entity exposes you to greater risk as you become directly responsible for ensuring compliance with all local employment laws and regulations.
With an EOR, you don’t need to understand every nuance of New Zealand’s employment laws. You can onboard new talent in minutes and automate core HR functions.
As a rule of thumb, if your headcount exceeds a certain threshold and you want to establish a significant presence in the region, you might opt for a local entity. However, if you want an easier way to hire quickly in New Zealand, an EOR is a better solution.
Step 2: Finding an EOR
You must carefully consider several factors when selecting the right EOR. Choosing the wrong service can lead to compliance issues, unnecessary costs, and a negative experience for your new hires.
Here’s what to look for:
- Legal compliance. The right EOR will have an in-depth knowledge of New Zealand’s labor laws, worker protections, tax regulations, and localized benefits. Look for a proven track record and inquire about their experience handling situations specific to your industry.
- Customer service: Do they provide round-the-clock support and offer dedicated account managers for every customer? Multiplier offers 24/5 human-first support (no bots!) and has dedicated managers for every account.
- Transparent pricing: Many EOR solutions have low entry costs but come with hidden fees or a confusing pricing structure. Make sure to get to the bottom of your EOR’s associated costs before making a decision.
- Total cost of ownership: It’s not always about finding the lowest price. After all, we all know that sometimes paying less can end up meaning paying more when it turns out the product is defective. When it comes to choosing an EOR, make sure you’re not scraping the bottom of the bargain barrel but investing in a product on a budget that doesn’t compromise on quality.
Step 3: Employing and onboarding in New Zealand
Send that contract over
Once you’ve found the perfect candidate – and the perfect EOR – it’s time to send them a locally compliant employment contract. Multiplier can generate contracts that are fully compliant with New Zealand law in less than five minutes You will be able to customize the terms of employment, including job responsibilities, working hours, remuneration, and termination conditions.
Once it’s ready to go, your EOR will send the contract securely and get it signed.
Enhance compensation with competitive benefits
Want to add a competitive benefits package? Rather than sifting through local vendors yourself, a great EOR makes it easy to choose from several packages that are locally administered. An EOR can even send employees the IT assets they need to get up and running.
Get all your documentation in order
Next, you’ll need to collect the new hire’s tax and banking information. If you’re using an EOR like Multiplier, that information will automatically be collected to set up payroll. All required documentation will be handled by Multiplier directly, ensuring a smooth process without paperwork hassles.
Onboarding employees in New Zealand may seem daunting, but the truth is that an EOR makes it pain-free.
Step 4: Run payroll for employees based in New Zealand
Running payroll for employees based in New Zealand can be complicated as it involves understanding specific tax rates and contributions. The country has a progressive income tax system with rates ranging from 10.5% to 39%, based on different income brackets.
Employer contributions are also mandatory for the KiwiSaver scheme and Accident Compensation Corporation or ACC.
KiwiSaver is a voluntary pension scheme offered by the New Zealand government. Employers are required to contribute a minimum percentage of an employee’s salary towards their KiwiSaver account, helping them save for retirement. Meanwhile, the ACC is a no-fault accident compensation scheme that provides financial support to employees who have suffered work-related injuries.
Understanding such complex regulations can be daunting and time-consuming for multinational companies expanding their workforce in New Zealand.
Employing through an EOR like Multiplier’s ensures accurate and timely salary payments while handling all local taxes, contributions, and withholdings. With Multiplier’s global payroll solution, you can handle payroll for all your global employees in one place – rather than dealing with a tangle of local vendors.
Employ top talent in New Zealand through an EOR
Onboard, pay, and manage all your international employees
Employment laws and regulations in New Zealand
New Zealand has several sets of regulations for hiring employees. Here’s a quick guide to some key employment rights and regulations you should be aware of:
- Employment Relations Act 2000: This act promotes fair treatment of employees and outlines core requirements for employment agreements, including employee protections, holiday entitlements, and a dispute resolution process.
- Written employment agreements: Employers must provide clear and compliant written contracts that adhere to the Employment Relations Act.
- Employee rights and protections: To ensure well-being and workplace safety, New Zealand provides employees with rights to:
- A safe and healthy work environment
- Transparent pay practices and minimum wage compliance
- Equal pay and protection from discrimination
- Joining unions and collective bargaining
- Support during unemployment
Employees are also entitled to flexible working arrangements under the Flexible Working Arrangements Act 2007. The Act also protects pay and employment equity, ensuring that men and women receive equal pay for equal work.
By understanding these rights and protections, employers can ensure they comply with employment laws when hiring and managing their workforce using an EOR in New Zealand.
Employee benefits and compensation
The current minimum wage in New Zealand is NZ $23.15 per hour. The country’s labor laws also mandate certain standard staff benefits. These include:
- Four weeks of paid annual leave
- Five days of paid sick leave (which can accrue up to 20 days)
- Paid parental leave for 26 weeks
Employers often supplement these statutorily mandated benefits with additional benefits to become more attractive to potential employees.
Explore Multiplier’s Global Benefits Administration to provide locally compliant and competitive benefits to your international employees.
Termination and offboarding procedures
When terminating employment in New Zealand, employers should be aware of the regulations governing notice periods and severance pay. The notice period typically varies but is usually around four weeks. Severance pay depends on what is stated in the employment agreement.
There are also specific rules for redundancies in specific scenarios, such as business restructuring or economic downturns. Employers can choose to pay in lieu of notice, but this must be stipulated in the employment agreement.
All these processes can be intricate, time-consuming, and potentially challenging for international employers unfamiliar with New Zealand’s labor laws.
This is where an EOR, like Multiplier, can play a pivotal role. By managing the offboarding process, an EOR ensures compliance with local laws and provides a smooth transition for both employers and employees.
Visa and work permit assistance
Hiring foreign workers in New Zealand involves obtaining appropriate visas and work permits. The type of visa required depends on various factors like the nature of work, duration of stay, and nationality of the employee.
These are the main visa categories for working professionals:
- Skilled Migrant Category Resident Visa: This visa is ideal for skilled workers with qualifications and experience in high-demand occupations.
- Long-Term Skill Shortage List Visa: This visa streamlines the process for occupations experiencing skill shortages in New Zealand.
- Working Holiday Visa: This visa allows young people (typically under 30) to work and travel in New Zealand for a set period.
- Recognized Seasonal Employer (RSE) Visa: This visa is for workers from specific countries who are employed for seasonal jobs in horticulture or viticulture.
Considering the complexities involved in visa application and renewal, expert assistance is beneficial. Multiplier provides work visa and visa support as part of its Employer of Record (EOR) services.
For further insights into how we handle global immigration issues, you can visit our Global Immigration page.
Get started with Multiplier’s EOR services
Multiplier’s Employer of Record (EOR) services offer a comprehensive solution for workforce expansion in New Zealand. You can hire without needing to set up a global entity and then outsource all HR tasks while delivering great employee experience,
Multiplier EOR ensures a smooth hiring, onboarding, and employee management process. We provide locally compliant contracts, manage payroll and taxes, and offer a range of customizable benefits tailored to local standards. This means no compliance headaches.
Book a demo to see how Multiplier simplifies HR and compliance in New Zealand.
