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Labour / Winter Pruning Payment Methods Introduction

Winter Pruning Payment Methods Introduction

The industry faces increasing levels of compliance regarding employment law. In recent years, it has been clarified that workers must be paid for their breaks when being paid on piece rate – this requires calculation of an average hourly rate calculated per day that can then be applied to the paid break. This adds significant complexity to payroll operations.

There are a few different payment methods across the orchards and recently there has been discussion on how the rate of pay should be calculated to ensure that there is compliance to paying the minimum wage for each hour worked. The Labour Inspectorate has stated there is case law which requires the minimum wage to be calculated for each hour worked, a calculation which can be challenging under piece rate calculations, due to several different factors. When rates are calculated per bay and a bay is not started and finished in the same day or week calculating an average hourly rate is complex.

NZKGI contracted HR Talent to investigate payment options to find a payment method that makes the industry attractive for people to become a part of and to simplify the payroll and HR compliance process. These issues are raised regularly by kiwifruit employers and the project aimed to investigate and identify solutions that could be used by employers across the industry. This means individual employers do not have to all seek the same advice, and it provides a platform for a discussion on how things can be done differently that may benefit the employee and employer.

The report completed by HR Talent is attached and introduces three different payment methods that could be used along with the advantages and disadvantages. The outcome of the project is a recommendation for a hybrid of hourly and contract rate payment methods. This takes out the need to calculate paid beaks and if minimum wage has been met while still providing incentive to the employee to perform well and reward them for it.

The HR Talent discussion document can be found here.

An example Pay Clause that can be inserted into your employment agreement can be found here.