3 REASONS TOP-UPS MAY BE REQUIRED FOR SALARIED EMPLOYEES ON DAIRY FARMS (PART 3)
There are in fact 3 reasons why a salaried employee working on a Dairy Farm in New Zealand may receive a top-up to their normal salaried amount. Those 3 reasons are briefly outlined below:
Salaried employees are required to be measured against minimum wage for each pay period. The maximum number of days employees can be measured against minimum wage is over a fortnight. Some idiosyncrasies here: If paid weekly then employees must be measured against minimum wage weekly. If paid fortnightly then they can be measured against minimum wage over a fortnight. If paid 4 weekly or monthly then the maximum period employees can be measured against minimum wage is fortnightly.
Time and a Half and Alternate days:
When one of the team works on a Statutory holiday then they are legally entitled to time and a half for the hours worked. This is easy if paying wages but gets tricky when employees are on a salary.
Here is how it is done:
The first requirement is a contracted daily hours number. This is a datum/ benchmark number that may be used to determine an estimated hourly rate of pay for a salaried employee (when factored in with the roster). We will assume contracted hours have been agreed. (Contracted hours generally range between 8-11 for full time salaried employees)
Because salaried employees are entitled to be paid time and a half for a Statutory holiday worked, if they exceed their contracted hours they will be entitled to a top-up. So depending on what those contracted hours are will depend on the optimum number of hours worked on a Statutory Holiday.
If the goal is to NOT top up their pay for a Statutory Holiday worked then they should only work 2/3 of their contracted hours as displayed below:
Contracted Hours of work per day: 8 9 10 11
Hrs worked x 1.5 = contracted hrs: 5.33 6 6.66 7.33
So in short, to avoid top ups employees should only work 2/3 of their normal contracted hours.
Note: If less than 2/3 of contracted hours are worked then the salary will in fact be accordingly reduced for that pay period.
Annual Leave Adjustments
When one of the team takes a day of annual leave then the value for that day of annual leave is measured as follows:
The value of a day of Annual leave will be the greater of: The average weekly pay for the last 4 weeks OR for the last 12 months. These averages are worked out by taking into account all three types of top-ups that have been paid… Minimum Wage, Statutory Holidays and Annual Leave Adjustments