OPINION: What great timing it was with the rain arriving last week.
We can all relax knowing the ground is having a nice soak before the summer. It was also timely that I wrote, a few weeks back, about the importance of being a good employer as the Ministry of Business Innovation and Employment (MBIE) is coming to Waikato to assess compliance with minimum employment rights.
They will be visiting farms and looking for any breaches of employment law, with particular focus on seasonal averaging salaries and whether farmers are keeping accurate time and wage records.
I personally welcome the initiative, as it gives us an opportunity to see where we can improve and starts the conversation that will hopefully better clarify what is required of employers. I hope MBIE are as keen as we are to make positive changes together.
The labour inspectorate visited 10 farms in Southland and found three of those did not have accurate records of the hours worked by staff and had underpaid their employees. From this the conclusion was drawn that a third of all dairy farm workers in Southland may be being underpaid, I truly hope this is not true, and look forward to seeing the MBIE's findings. Farmers need to ensure that they are filling in time sheets and ensuring that their hourly rate does not fall beneath the minimum wage of $13.75 per hour.
Federated Farmers is keen to work with MBIE to educate farmers and clarify how they are meant to comply.
Whilst there are always a few in every industry that deliberately don't comply, I would say the majority of farmers are great employers and make every effort to get it right. One of the difficulties is around seasonal averaging, which is a payment method used to provide a stable income to dairy farm workers. We need to be proactive here and know what hours our staff are actually working.
Dairy farming is a unique industry with its pay structure, due to the seasonal nature of the work. During peak season, calving, my staff can work up to 58 hours a week and in the down season they can work around 40 hours a week, averaged over the roster cycle. To offset the peaks and troughs and inconsistency of their wages, we average out their salary so their hourly rate fluctuates but their salary stays the same.
I have seen the result of not doing this and you always get staff who struggle to manage their money in the down season, they come to you stressed and wanting more work when there is none. To avoid this, in the peak season they are working at a lower hourly rate of approximately $16 an hour and in the down season they are earning a higher hourly rate of approximately $24 an hour. This way they have a solid reliable income that will not diminish when the work does.
So I put it to the labour inspectorate coming to Waikato, which method do you feel is more responsible as an employer?
I for one think it is irresponsible to let your staff go broke in the down season, just as it is bad management to let your staff work so many hours that they are getting below minimum wage. It is a grey area on how this is to be avoided.
A work environment is about compromise and recognising the needs of your employees. The industry needs a certain amount of flexibility to go with the peaks and troughs that it exists in. I put it to my staff whether they would like to work six days on and two days off or nine days on and three days off. It is no surprise they chose the nine days, because who doesn't want a long weekend. What would be valuable in these inspections is to clarify what works, what staff want and make an effort to understand the nature of the industry.
If you take away the flexibility of how employers and employees co-ordinate, it could put the cat amongst the pigeons, but this does not mean employers can take advantage of their staff, be they Kiwis or migrants.
The dairy industry offers a huge opportunity and head start to our youth. What other industry can you think of where 19-year-olds can be earning $49,000 with or without an education?
It would be a shame if we let ourselves down here, so I welcome MBIE's visit to the Waikato, my door is always open, lets talk.
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