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KiwiSaver Loophole Closed

Contributor:
Fuseworks Media
Fuseworks Media

Parliament has passed law to ensure employers pay contributions to their employees' KiwiSaver accounts and putting workers' rights to rest, and meal breaks and infant feeding breaks into law.

The Government took the unusual step of introducing the KiwiSaver changes into Parliament yesterday and instead of allowing them to go through the normal legislative process, slipped them in as amendment to the meal breaks bill that was already before MPs.

National MPs attacked the process in their speeches and voted against the amendment as it passed into law under urgency.

Labour Minister Trevor Mallard said it would amend the Employment Relations Act to prevent employers paying employees with KiwiSaver accounts less than those who were not in the scheme.

"In effect, the employees are taking a pay cut, which the employers are using to pay their KiwiSaver contribution," he said.

"Employers have been able to get away with this in total remuneration packages in particular, when they have insisted that the packages include employees paying the employers' compulsory KiwiSaver contribution."

Mr Mallard said this happened despite the fact that the Government reimbursed employers with a $20 a week tax credit, which covered their contribution to employees earning up to $104,000 a year.

United Future leader Peter Dunne said he could not understand why the amendment was being rammed through Parliament.

"Employers argue this means workers in the KiwiSaver scheme are paid more than their colleagues, leading to workplace disharmony and disruption," Mr Dunne said.

"If there are ratbag bosses out there who exploit loopholes in the law, then by all means get stuck into them, but surely it's not necessary to cause widespread upset in the workplace just to punish the few."

Mr Mallard put the law change into an existing employment relations bill, the Employment Relations (Breaks and Infant Feeding) Amendment Bill, which went through its committee and third reading stage.

The bill introduces statutory requirements for meal and rest breaks, although entitlements were in most collective agreements.

Mr Mallard said breastfeeding was a vital health issue and employers would have to provide appropriate facilities and breaks for employees who wanted to breastfeed or express breast milk while they were at work.

A code of practice would guide employers on how to meet their obligations.

The industrial relations select committee recommended the bill be passed with a number of small amendments.

Under the provisions in the bill for meal and rest breaks, employees would be entitled to a minimum of:

* One 10-minute rest break if they have worked between two and four hours;

* One 10-minute rest break and one 30-minute meal break if they have worked between four and six hours; and

* Two 10-minute rest breaks and one 30-minute meal break if they have worked between six and eight hours.

One of the amendments ensured that workers with greater entitlements for breaks did not lose them as a result of the new law.

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