Recommended.co.nz | Guide2.co.nz | Voxy.co.nz | Gimme.co.nz
Homepage | login or create an account

Department Of Labour Investigating KiwiSaver Ripoff

Contributor:
Fuseworks Media
Fuseworks Media

The Department of Labour is investigating claims that employers are paying less to workers who are in KiwiSaver and receiving an employer contribution to their savings.

This was confirmed by Labour Minister Trevor Mallard who said it appeared some employers were offering employees who had joined KiwiSaver, pay increases that were 1 per cent lower than those given to non-KiwiSaver workers, ostensibly to cover the employer contribution.

The employers could then benefit by pocketing the Government's tax credit.

"Employers are getting a tax credit of $20 a week, which will
fully compensate for the 1 per cent employer contribution for employees
who are on a salary of up to $104,000," Mr Mallard told the Weekend
Herald.

"Therefore, any suggestion that employees also have to cover
this employer contribution through their remuneration is unethical."

Mr Mallard said employers going down this route must wake and start behaving themselves.

"I just though that in New Zealand we had higher standards than that."

Mr Mallard would not name the employers who had been accused in
letters sent to him, but he said he thought there were about three
companies He said the Department of Labour was looking into whether the
actions amounted to a breach of good faith under the Employment
Relations Act, which carried fines of up to $10,000.

Mr Mallard said he might have to consider whether rules were needed to stop the practice.

Featured Books on KiwiSaver & Saving

Credit Card Comparison TablesCompare Credit Cards - Independent interest rate and fees comparisons for New Zealand banks.

About guide2.co.nz : money

Find the latest money news and 'how to' guides on Guide2Money.

Ask our researchers your personal finance questions.

Your Questions. Independent Answers.