Temporary employment - requirement to make Kiwisaver deductions

2010 amendment means existing KiwiSaver members starting temporary employment can give employers a notice requiring deductions of contributions from salary or wages.

An amendment has been made to ensure that existing KiwiSaver members who begin temporary employment are able to give their employer a KiwiSaver notice requiring deductions of contributions to be made from salary or wages.

Background

Temporary employees, such as those employed for fewer than 28 continuous days, are not enrolled automatically in KiwiSaver. However, a temporary employee can opt-in to KiwiSaver either by giving their employer a KiwiSaver deduction notice or by contracting directly with a KiwiSaver scheme provider. The KiwiSaver deduction notice requires an employer to deduct KiwiSaver contributions from an employee's salary or wages. The requirement that an employer deduct an amount for the employee's KiwiSaver scheme also ensures that, as long as certain other criteria are met, compulsory employer contributions are made to the employee's KiwiSaver account.

If an individual is already a KiwiSaver member and begins temporary employment, they should be able to have KiwiSaver deductions made from their salary or wages and receive compulsory employer contributions. However, this was not previously allowed under the legislation.

Key feature

New subsection 22(3) has been inserted to allow an existing KiwiSaver member in temporary employment to give their employer a KiwiSaver deduction notice.

Application date

The new rules apply from the date of Royal assent, being 7 September 2010.