HR Practice For Payroll Practitioners

HR Practice for Payroll Practitioners

Golden rules for payroll practitioners in regard to employment agreements:

• Always read the employment agreement as a whole (start to finish). • Write notes on what you find out and create a guide for payroll. • Never give advice on its contents if you do not know. • Clearly define which agreement applies to which employee.

Employment agreement clauses

When reading employment agreements for the first time there are some clauses that payroll practitioners should look out for because they detail how to deduct monies owed to the business from the employee if they do not meet the requirements set in their employment agreement.

Type of clause

Description

This is their actual start date so annual and the other types of leave can be set up to accrue. It also defines what will be the first pay date.

Start date

Salary or wages

Are they paid an annual salary or an hourly rate? This may be the difference between paying them the same every week or paying on a timesheet submitted.

Pay date

The day defined in the employment agreement for this employee to be paid (weekly, fortnightly, monthly or something else).

Leave

What has this person been given in regard to leave entitlement — the minimum or something greater? If it is greater what is the agreement on how it will be calculated and paid?

Additional payments (reimbursements, commission, etc.)

What are these — are they payroll-related or accounts? If payroll, what has to be provided as evidence and when are the payments made?

Notice period

The notice period that this employee must give if they resign. If not in the employment agreement it is based on the pay period.

Forfeiture of earnings This could be a clause that states if the employee does not give the required notice period the notice period will come out of the final pay.

Deduction from wages

For any monies to be taken out of an employee’s wages the employer must have written consent. This clause would cover this type of situation. For instance, staff accounts or valuable property not returned.

© New Zealand Payroll Practitioners Association, Sep 2024, Ver 12

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