Farmers as employers – dealing with timesheets

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As farms both within Northland and nationwide become larger and staffing numbers naturally increase, farmers are continuing to grapple with increasing regulatory compliance and their role as employers.

Farmers often hear that the Ministry of Business, Innovation and Employment (MBIE) is focusing on farmers as employers and wonder what their obligations actually are and how best to meet them. As a rural lawyer and also a sharemilker with her husband Fraser employing two staff, Alice Chapman was committed to getting this right but in a simple and effective way. In this article she shares how they have managed the “timesheet issue” on her farm.

So, what are the rules?

Section 4B of the Employment Relations Act 2000 was inserted into the Act on 1 April 2016. It requires that an employer must keep records in sufficient detail to demonstrate that the employer has complied with minimum entitlement provisions. Minimum entitlement provisions means:

This article focuses on records in relation to minimum wage entitlements and the requirements for employers to maintain wage and time records for each of their employees. The adult minimum wage applies to all workers who are 16 years of age or older provided neither the “starting out” nor “training” minimum wages apply. From April 1st 2016 the adult minimum wage was increased to $15.25 per hour.

The adult minimum wages applies to all workers who are 16 years of age or older provided neither the “starting out” nor “training” minimum wages apply.

Employment New Zealand outlines what labour inspectors from MBIE have the power to do. This includes entering the employer’s premises under the provisions of the Act, interviewing people and requiring copies of wages, time, leave and holiday records. Employers have to make these available right away. Failure to comply can lead to penalties under the Act.

The Minimum Wage Order has been changed to allow for a fortnightly minimum wage rate effective from 26 June 2014. This means that all employees are entitled to be paid the minimum wage for each hour they work within each fortnight. The fortnightly calculation allows an employer to offset payments for work in one week against payments due to an employee in the following week. The two week averaging rule is useful for farmers with staff often on a two week roster.  It is important to remember that top-up payments, so employees earn at least the minimum wage, may be required during busy seasons on farm.

Dairy NZ notes that seasonal averaging, where employers seek to average out pay across a 12 month period on the basis that the large number of hours worked during calving will be off set against the minimum number of hours in the low season, is not allowed in relation to minimum wage. This was made abundantly clear in the 2013 case of Whyte v Labour Inspector, Kate Feeney for the Ministry of Business Innovation and Employment. Each hour must be paid at least the minimum wage and the maximum averaging is over a two week period.

In a media release MBIE Central region manager Kris Metcalf advised that “Farmers need to lift their game in complying with minimum employment rights and can expect a strong enforcement response from the next phase”. “There are financial penalties for not complying with employment laws of up to $10,000 for individuals and $20,000 for companies”. Mr Metcalf reminds farmers that examples of sufficient wage and time records can be found on the IRD and Dairy NZ websites.

…employees are entitled to be paid the minimum wage for each hour they work within each fortnight. The fortnightly calculation allows an employer to offset payments for work in one week against payments due to an employee in the following week.

Timesheets appear to be the most effective way of ensuring that the employer keeps records in sufficient detail to demonstrate that they have met the minimum entitlements under the Employment Relations Act.

On Alice’s farm

At the start of the season my husband Fraser clipped timesheets to a board in the cow shed. The time sheets were completed but sometimes not in a timely manner and nearly always the timesheets were not in a great condition!!! The 2IC and senior farm assistant preferred to keep their hours electronically on their smart phones and then transfer the information to the hard copy timesheets at a time that suited them. We considered that this seemed to be double handling and so spoke to our staff about whether their time recording apps allowed for the time sheets to be emailed. It transpired that at least one app did so the plan now is that the staff email the timesheets directly from the app on their smartphones to our farm email address (we are currently using Easy Timesheet). They can then be saved as records as required by the Employment Relations Act.

There are various time sheet smart phone applications available and in addition many farm technology providers offer bundles that can also assist with your obligations in relation to the Holidays Act 2003 and other payroll issues.

This allows us to not only ensure that we are meeting our legal obligations but also assists us in our endeavour to be great employers who effectively manage our staff workloads and arrange days off in lieu where appropriate. As a reminder the Dairy NZ website says “great” employers ensure:

  • employees are on a well-designed roster
  • are not likely to normally work more than 50 hours per week
  • are not likely to work more than 10 hours a day; are not likely to work more than four hours in any day before a break is taken
  • have regular days off, set by the roster system, and
  • have at least two consecutive days off.

If you have any questions about how to ensure good time keeping, or any other rural or employment matter, one of WRMK’s rural law team will be happy to help.