Swings + Roundabouts Summer 2020

Following the landslide victory, the incoming Labour government has a number of plans in place that may impact on ECE centres. The following is a summary of the impacts on employment issues: BUSINESS HIRING PACKAGE While not predicted to impact on ECE centres in any significant way, Labour intends to respond to the growing unemployment rate by supporting job creation in a number of ways through a job creation support programme that will aim to create 40,000 new jobs in New Zealand. While not directly related, the ECC will be watching for continued support for centres struggling to attract ECE-qualified teachers. MINIMUM PAY RATE The minimum pay rate is scheduled to be revised on 1 April 2021, to $20.00 per hour. This represents an increase of 5.82% on the current minimum rate. While there are few employees in ECE on minimum wages, the roll-on effect for other staff expecting similar increases to maintain parity will put increased pressure on centres to apply wage increases across the board. PAY EQUITY This policy strives to assist the reduction and eventual closing of the gender pay gap. The Teachers’ Union, NZEI, has been keen to progress a pay equity claim against the government for some time in the belief that generally teachers are underpaid. They were successful in a pay equity claim for careworkers and teacher aides, adding to the impetus for teachers to be next PAY PARITY This is about ensuring all ECE-qualified teachers are paid the same where they are doing substantially the same job, and was born out of the growing disparity between the pay rates for teachers working in ECE centres versus those working in kindergartens. The Minister has commenced an initiative to achieve pay parity over the next three years or so, with an increase to the lowest paid teachers earlier in 2020. Further funding increases to support increased pay parity are expected in future budgets. LIVING WAGE RATE The Living Wage rate is currently $22.10. Labour wants to implement a system where all employers providing services to the Government are expected to meet minimum living wage requirements. This policy suggests that if you wish to provide services to the Government, your minimum wage and lower-wage employees will need to be paid at least $22.10 (or its increased amount in 2021). This represents a wage cost increase of 10.5% on the coming $20.00 minimum wage rate and 17% on the current minimum wage. Similar to the growth in Minimum Wage requirements, this will have a roll- on effect for those qualified staff in ECE expecting to maintain parity. What is not clear at this point is whether Labour’s plan is likely to impact on services like ECE where government subsidisation plays a significant role. FAIR PAY AGREEMENTS Labour is seeking to introduce fair pay agreements in competitive industries that, in their opinion, have demonstrated a tendency to engage in a “race to the bottom” regarding wages to manage their costs. Fair pay agreements are, in effect, a form of collective agreement forced on employers and are likely to be heavily promoted by unions like NZEI. HOLIDAYS ACT SIMPLIFICATION While the details around this proposal are unclear, a simplification of the Act should result in more straightforward pay rate calculations for annual and incidental leave, as well as simpler eligibility requirements. These changes hopefully, will reduce risk and administrative demands on centre employers. Unfortunately, at this stage, there do not appear to be any plans to simplify the Parental Leave and Protection of Employment Act. SICK LEAVE Labour has promised to increase sick leave from five to 10 paid sick days per year minimum to ensure that employees can take their sick leave when they need it. While this policy will undoubtedly assist in preventing the spread of illnesses through a workplace by allowing sick employees to stay home for greater periods without fear of losing income, it almost certainly brings a higher cost of absenteeism to employers. In response, we predict more centres will be seeking medical certificates from employees to justify sick leave instances. IMPACT OF A RETURNED LABOUR GOVERNMENT ON ECE BY PETER REYNOLDS December 2020 { 12 }