Donation Rebate – A rebate is available to individuals for charitable gifts paid out during the income year. The maximum rebate is the lower of 33.3% of the total charitable gifts paid in the income year or $500. Payments of state school fees, as long as they are applied to the school’s general funds, also qualify for this rebate. (Payment for tuition or specific activities cannot be claimed.)

Personal Property Securities Act

On 1st May 2002 the Personal Property Securities Act (PPSA) came into force. The Act re-writes the entire securities law as it relates to personal property, except land and interests in land.

One of the main changes is in relation to Retention of Title (Romalpa) clauses. In the normal retention of title situation goods are delivered to the purchaser with the term of the contract stating that property in the goods only passes when they have been paid for. This is usually disclosed in the vendor's terms of trade.

Under the PPSA title passes when goods are delivered unless the transaction is registered in the PPSA register. Therefore to protect against bad debts the vendor must, with written agreement of the customer, register a financing statement against the PPSA register. A financing statement is the legal name for the form used to lodge on the PPSA register and includes details of your company as the secured party, details of the customer and details of any additional collateral if any.

It would obviously be ridiculous to have to register every time a sale is made. The best way to overcome this is to register one financing statement for each customer/purchaser, which encompasses all the different products your company sells. Then all goods you sell to that customer are protected by your ROT clause.

To obtain consent it would be wise to send customers a standard form which the customer requests you as supplier to open a credit account for them. The form should say something to the effect that the customer applies to open a credit account with the supplier and agree to buy all goods on that account. Once this is done and lodged with the PPSA you will then have valid security against your goods if a customer does not pay. Your lawyer will be able to provide assistance in this area.

If a customer was liquidated the order in which you receive a payment from them follows the order in which you registered compared to other parties who have registered security against the same customer. In other words "first in first served".

Goods on-sold are now covered under the new PPSA. We suggest a review of your current terms of sale and consideration given to registering a financing statement for your larger customers at the least.

If you have any further questions please do not hesitate to call our offices.

Annual Leave

Under the Holidays Act, annual leave must be calculated to the employee’s anniversary date, not the employer’s company anniversary date.

The act provides for three weeks annual leave entitlement for all permanent employees on each anniversary date following one years continuous employment.  Section 33 prohibits employers and employees from contracting out of this requirement.

Permanent employees are both full and part time employees.

Casuals, temps and seasonal workers are paid holiday pay based on the ‘old’ 6% rule.  Holiday pay may be paid with their wages, but must be shown separately on pay slips.

So, a full time employee receives three weeks annual leave (AL), of which each week comprises 5 days paid and 2 days unpaid, if they work a normal 5 day week.

A person working 40 hours over 4 days would still receive 3 weeks AL.  Each week would consist of 4 days paid and 3 days unpaid.

Likewise, a part time employee who works 3 days per week, would be entitled to 3 weeks AL.  Each week would consist of 3 days paid and 4 days unpaid.

We cannot stress enough the importance of ensuring your employees take their full 3 weeks AL entitlement each year.  Problems will exist where employees are permitted to use up their AL entitlement by taking individual days off, because they will not have had 21 days leave in any given year.

Employers must allow 2 weeks uninterrupted AL if requested by an employee.

Employers can instruct employees when to take AL, currently with 7 days notice.  However from September 1, 2002 this notice period will be extended to either 14 or 21 days.

ACC

ACC Workplace Safety Management Practices Programme is an initiative to reduce the cost of ACC levies for your business by 10 to 20 %.

There are three levels of discount:

10% (primary level) - Meets the minimum performance standards across all aspects of the workplace health and safety management.

15% (secondary level) – recognising high standards of performance and good practice across all aspects of the workplace health and safety management

20% (Tertiary) – recognises best practice across all aspects of workplace health and safety management and a commitment to continual improvement

The process has three steps:

·        Completing a self assessment of your workplace

·        Applying to ACC

·        Undertaking a audit by an independent ACC approved workplace health and safety auditor

The Business Development Group Limited has a number of clients they have helped through this process to achieve a 20% discount

Payroll Legislation

a) Employees - Just who is an employee?

The Employment Relations Act 2002 (s6), refers to an employee as

a)     Any person of any age employed by an employer to do any work for hire or reward under a contract of service; and

b)     includes

(i)     a home worker; or

(ii)   a person intending to work; but

c)     excludes a volunteer who-

(i)     does not expect to be rewarded for work to be performed as a volunteer; and

(ii)    receives no reward for work performed as a volunteer.

So, this section of the act tells us that not only is someone who actually works for you an employee, but someone who intends to work for you, that is, a person who has signed an employment agreement but not yet started work is also an employee.

What then of shareholder employees?  At law, a company and any person it employs are different legal entities, so there is no reason a company and shareholder or director employee cannot enter into an employment agreement.

The Privy Council in Lee v Lee’s Air Farming Ltd, and the Employment Tribunal held that a shareholder/director who worked for the company in return for a salary was an employee as defined by the Employment Contracts Act 1991.

Partners in a partnership are not employees because a partnership is not a corporate body.

 Only employees are entitled to the benefits and protections provided by the Employment Relations Act, the Holidays Act, the Wages Protection Act and other employment legislation.

b) Records

Now that we have defined an employee we need to look at the records to be held for each employee:-

·        Name

·        Age (if under 21)

·        Employee’s postal address (not employers PO Box)

·        The kind of work employed to do

·        Type of agreement in place.  (Collective or individual)

·        If a Collective Agreement, then the title, expiry and employee’s classification under the agreement.

·        Time sheets

·        Wages/salary paid and method of calculation for every pay period.

·        Details of Employment relations education leave taken.

These records must be held for a minimum of 6 years however the IRD can ask to look at records up to 7 years old, so we recommend all records be retained for 7 years.

 In the event of a dispute, should the employer not be able to provide a hard copy of the above records, the court will rule in favour of the employee.

 In addition to the above, the Holidays Act (s31) requires employers to keep a record of holidays in a holiday book, showing for each employee:- 

·        Employees name

·        Date employment commenced

·        Date employment ceased

·        Date of each annual holiday entitlement

·        Date each holiday is taken

·        Amount paid in respect of each holiday

·        Amount of holiday paid on termination

The holiday book may be incorporated with the wage records, but must be available for inspection for 6 years.

ACC

The ACC invoices currently being received by employers, replace the IR68A’s that had to be filed by 31 May in previous years.

The IRD provide ACC with the Gross Earnings of your employees based on the details you provide to the department in your Employer Monthly Schedules (PAYE).

It is very important you check these invoices because if your monthly schedules did not show separately, earnings for withholding payments, a deduction will not have been made by ACC. Withholding payments do not attract employer ACC. ACC is paid by the recipient of the withholding payment.

If you have employees who earn over the $85,795 threshold an adjustment should have been made by ACC, but please check carefully.

We believe that ACC will be itemising their invoices so it should not be difficult to check each component.

If you have any questions please feel free to call Sandra Morriss on 07 578 0162 or e mail .