Let’s be ready to talk about wages



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, let’s talk.

James Houghton is Fed­er­ated Farm­ers Waikato pro­vin­cial pres­i­dent.

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