cappuccino

I know I'm not eligible to join until I have residency but my employer made us sign a caveat to our contracts today that stated that although the employer, by law, will have to pay 1% contribution to our personal Kiwisaver plan, they will take this from our salary. This means that we pay the employee contribution AND the employer contribution.

I don't think this is fair but they must have taken legal advice before taking this step. Does anybody else have such a tight employer?

Kiwiprincess

Yikes that sounds bizarre.

However, without wanting to know too much about it, are you sure it doesn't actually refer to future salary increases and future salary negotiations?

Because, that in itself i wouldn't be too surprised about. It was bound to happen that requiring compulsory contributions by employers (even taking into account the various tax breaks/rebates or whatever) would simply mean that it was used as part of an overall package.

I have absolutely no idea if it is legal, but like you i assume the companies that are doing that/will be doing that have sought legal advice.

Still doesn't alter the fact they are pretty flamin' mean.

I still plan to sign up for kiwisaver but i negotiated my salary increase first.

danny.f

Doesn't mean you can't counter-act! Surely they owe you it back once you are elligibubble.

Bellasmum

I would think hard about signing the caveat. You need to know what they plan on doing with the deductions.

My understanding is that employees who do not meet the citizenship and residency requirements, including people who hold temporary, visitor and student permits cannot be KiwiSaver members.

http://www.kiwisaver.govt.nz/

RobClubley

That's not on at all - don't they have a government/legal requirement to pay it for you (once you're a resident)?

Them refusing to do so defeats half the point of the scheme!

Kiwiprincess

That is what makes me think the letter was supposed to refer to future salary increases - it becomes part of the "package". Sneaky methinks.

cappuccino

Yes KiwiPrincess, on reading the letter we now have, it does refer to future pay increases. However, they are also penalising people who have gone into Kiwisaver after receiving their increase this year by deducting the amount from their salary.

At this stage, it doesn't affect me because:
a) I am not a resident so unable to join
b) I have only been with the company for 2 months so not due for a pay rise

They are not taking any money from me at the moment because I have not joined Kiwisaver but I guess they will when I get residency and then join it.

However, I just think the whole thing is unfair and a loophole that small business will exploit. Yes they have a legal obligation to pay the contribution, but I doubt it says anywhere where they can get this money from ie their profit or the employee salary! We had no choice but to sign.

Also, being so tight, they make us sign a document that states if they send us on expensive training courses, we have to stay with the company for x amount of time (depending on the cost incurred by company) else we have to pay it back. My argument is that I am undertaking the course for the sake of the company and to increase the profit of the company directly by running courses that I am then qualified to teach.

RobClubley

I've had that clause before. I'm told they have no legal standing to enforce it but surely if you've signed a contract with them to that effect they must have!

Kiwiprincess

The 'deducting from salary' part is very very sneaky.
The training thing is mean too. I have worked for organisations which in the case of studying for a degree have asked employees to pay half, and then that gets reimbursed at the end of the degree if they are still working there.

But i do think it is sneaky and mean about kiwisaver.

RobClubley

Some employers are good - Transpower for example - they announced to their staff that they would be paying the full 4% from the very start. Good on 'em.

Batty

I was wondering when this would come up Yes, lots of companies are doing it. You get x% increase but if you are in, or elect to be in, Kiwisaver then the 1% will come out of that increase. And yes, legal advice has been sought. I remember saying at the time that this would happen - and I can't understand why it hasn't come up on Talk Radio yet

On the training thing - I did an Open University course when I was working in Dublin some years ago and had to sign a letter stating I'd stay for 2 years if I passed .... and 3 years if I didn't

I passed .....

Yotty

Another thing worth remembering is that any gains in the policy are taxed at 33%

littleal

They cannot do this at the moment unless possibly you earn more than $100k. The employer can claim back their contribution from the govt of up to $20 per week which covers the 1% of most employees. However as the employer contribution % increases year by year, less will be covered, which is what they are trying to mitigate themselves against in the future.

Their argument may well be that some employees choose not to have the Kiwisaver and that is not a level playing field for them. However the British approach to pensions is if a person opts out that is their loss. A pension scheme should be an incentive to save which is not the case if people are asked to choose between money now or money later.

Alison

Nerine

Oh the old slavery clause huh! Some of the local authorities in the UK used to do the same, except they waived it if you stayed within local govt.

If/when it's time to move on some employers will buy-out these lock-ins, even Kiwi companies have been known to do it if they want you badly enough. Guess that this and the Kiwisaver claw-back doesn't do much to make you feel like a valued employee but if the chance to do some expensive courses comes up take them, the training is too valuable to pass up.

cappuccino

http://www.nzherald.co.nz/section/1/...ectid=10503758

At last this has been recognised as something unethical!