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:

Minimum Wage

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.

Statutory Holidays

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

Different Rosters = Different number of Leave and Rostered days (Part 2)

Different Rosters = Different number of Annual Leave days per season and of course varying numbers of Rostered Days Off.

The total number of Annual leave days a person is legally entitled to will depend entirely on the Roster that is utilised either in town or on the farm. In town and in some cases on dairy farms, those on a standard 5 days on and 2 off (5/2) will be entitled to a total of 19.98 days of Annual leave (basically 20 annual leave days per season or year which when the example works a 5 day week this will be 4 weeks)

However any deviation from a 5/2 roster will mean a subsequent change to the number of Annual leave days someone is entitled to whether they work in town or on the farm – same rules.

Working out your own roster can be tricky enough especially if you make the whole process hard on yourself. You may have a scenario like this:

  • Maybe a whole bunch of different rosters over the season and then…
  • Try figure out the Annual leave entitlement in days and then…
  • The number of Rostered Days Off as a result of the roster created
  • And is this number of Rostered Days Off the same as the agreed number in the Employment Contract?

At Agrismart we have actually created our Roster Builder to simplify this process and give you all the answers listed above very quickly. Your calculator will not be required here!

Below is a table displaying a bunch of common Roster scenarios and the numbers generated from them.