Blog 3 - Impact on Employers

Our last blog (click here) covered the impact of the New Zealand Income Insurance Scheme (NZIIS) on employees. In our first blog (click here) we covered a general introduction to NZISS.

In this blog we will look at the impact on employers which is more substantial. Yes, like employees, they too will pay 1.39% but across their entire payroll. To put this into dollar terms:

There are several factors that impact on employers, some we know have been considered whilst others will need to be worked through.

Redundancy Clause: employers will have to provide a minimum of 4 weeks on redundancy. This will be enshrined in legislation which means that employers will need to overhaul their employment agreements.
Group Health Schemes: it is unclear how this will play out given group schemes provide support to employees with health issues.
Group Income Protection: at this point, we understand that any insurance payout will be deemed as income for the worker. As such, the private income protection will take precedent however the employer (and employee for that matter) will also still be paying the premium on the NZIIS. In other words, paying twice for one set of cover.
Private Insurance: in line with the group income protection noted above, there is no dispensation for employees who have their own insurances (i.e. income protection, redundancy cover as part of your house insurance).
Medical Certificates: sadly, the employer will again be at the mercy of the medical certificate for sign-off on health and or disability. Sadly because the medical certificate framework currently lacks integrity and accountability on those writing the certificates and ACC for accepting them.
Holiday Pay: an employer is ‘encouraged’ to hold a job open for the time the person is off due to health issues. There is no clarity on whether that technically means holiday pay is still being accrued as is the case with ACC claimants.
Additional 6 Months: a worker can get an additional 6 months of NZIIS support if they are in vocational training or receiving vocational rehabilitation.

To us it seems there are more questions than answers at this point. This bothers us as employers will be footing the bill for this and for any mistakes if it does not go well.

Our next and final blog of 4, we will cover General Observations. We ask a range of rhetorical questions that we aim to turn into actual questions to MBIE and ACC.

The pending NZ Income Insurance Scheme Blog 3 of 4

Blog 3 - Impact on Employers

Our last blog (click here) covered the impact of the New Zealand Income Insurance Scheme (NZIIS) on employees. In our first blog (click here) we covered a general introduction to NZISS.

In this blog we will look at the impact on employers which is more substantial. Yes, like employees, they too will pay 1.39% but across their entire payroll. To put this into dollar terms:

There are several factors that impact on employers, some we know have been considered whilst others will need to be worked through.

Redundancy Clause: employers will have to provide a minimum of 4 weeks on redundancy. This will be enshrined in legislation which means that employers will need to overhaul their employment agreements.

Group Health Schemes: it is unclear how this will play out given group schemes provide support to employees with health issues.

Private Insurance: in line with the group income protection noted above, there is no dispensation for employees who have their own insurances (i.e. income protection, redundancy cover as part of your house insurance).

Medical Certificates: sadly, the employer will again be at the mercy of the medical certificate for sign-off on health and or disability. Sadly because the medical certificate framework currently lacks integrity and accountability on those writing the certificates and ACC for accepting them.

Holiday Pay: an employer is ‘encouraged’ to hold a job open for the time the person is off due to health issues. There is no clarity on whether that technically means holiday pay is still being accrued as is the case with ACC claimants.

Additional 6 Months: a worker can get an additional 6 months of NZIIS support if they are in vocational training or receiving vocational rehabilitation.

To us it seems there are more questions than answers at this point. This bothers us as employers will be footing the bill for this and for any mistakes if it does not go well.

Our next and final blog of 4, we will cover General Observations. We ask a range of rhetorical questions that we aim to turn into actual questions to MBIE and ACC.

Stay tuned.