New laws and rules coming into effect in 2018

January 18, 2018 by

A number of new laws and regulations are coming into effect in 2018 across New Zealand, including higher minimum wages and longer paid parental leave. For business owners the following new laws and proposed new laws are particularly relevant:

new laws

Employment law

Increased minimum wage.

Employers have to pay their employees at least the minimum hourly wage rate for every hour worked. On 1 April 2018 the minimum wage increases from currently $15.75 to $16.50 p/h.

There is no minimum wage for employees under 16 but all the other minimum standards and employment rights and obligations apply. The starting out rate is likely to be abolished and the training wage may be increased to $13.20 p/h.

Increased paid parental leave

Parliament has passed a new law which increases paid parent leave incrementally from 18 to 26 weeks by 2020. The extended paid parental leave will be rolled out as follows:

before 1 July 201818 weeks
1 July 201822 weeks
1 July 202026 weeks

Certain requirements have to be met before an employee is eligible for paid parental leave. Employees who have been employed for an average of at least 10 hours a week for any 26 of the 52 weeks preceding the birth of the child are generally eligible for paid parental leave.

Parental leave is tax payer funded. It is not paid by the employer. The Parental Leave and Employment Protection Amendment Act 2017 (2017/45) received its royal assent on 4 December 2017.

No contracting out of personal grievance position

The Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill 2017 was rejected in its second reading. The Bill sought to change the Employment Relations Act 2000 to allow employees with an annual gross salary over $150,000 to contract out of the personal grievance provisions.

Changes to New Zealand’s Overseas Investment Regime

The Overseas Investment Amendment Bill 2017 aims to ensure that overseas investment in sensitive New Zealand land will have genuine benefits for New Zealand.

Only New Zealand and Australian citizens, and permanent residents of both countries that are living in New Zealand, will be able to buy an existing home in New Zealand without going through screening from the Overseas Investment Office. Citizens will be exempted from screening regardless of where they reside.

Permanent residents of New Zealand and Australia would need to will to be tax residents in New Zealand to purchase residential land. This means that such persons will have to have a permanent resident visa and have resided in New Zealand for the last 12 months, and have been present in New Zealand for at least 183 days in that period.

Residents who are not permanent residents in New Zealand will be able to apply to the Overseas Investment Office for consent to buy a home, provided they show a commitment to reside in New Zealand.

Overseas investment into sensitive land must satisfy one of the following tests:

  • the commitment to New Zealand test in section 16A; 
  • the benefit to New Zealand test in section 16E; or
  • the increased housing on residential land test in section 16C (but this test is only available if the relevant land is residential (but not otherwise sensitive) land).

The Bill is currently at the select committee stage.

Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2017

In international comparison New Zealand has been extremely slow in putting measures in place to combat money laundering and terrorist financing.

New laws extend the scope of the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act).

From 1 July 2018 lawyers, conveyancers, and business that provide trust and company services will be required to put preventative measures in place to help tackle money laundering and financing of terrorism.

From 1 October 2018 accountants have to comply with the AML/CFT Act if they provide certain types of business services. Stage 3 of the roll out will include real estate agents (1 January 2019), business that trade in high value goods (1 August 2019) and sports and betting services (1 August 2019).

The new laws require business and professionals to:

  • designate a AML/CFT compliance officer;
  • conduct a risk assessment of their business;
  • report suspicious activities;
  • implement policies and procedures to ensure compliance with AML/CFT Act;
  • vett and train employees;
  • verify ID of every (new) client (copy of ID or passport and a recent bill);
  • internal systems must be reviewed and audited every 2 years; and
  • file an annual report on compliance.

General Data Protection Regulations

New laws from Europe will also have an effect on how New Zealand businesses operate. The General Data Protection Regulations (GDPR) will come into force on 1 May 2018. This new European law will also affect New Zealand business that are trading internationally.

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