SUE MORONEY (Labour): It is a pleasure to rise in support of this very good bill, which has been brought to the House in the name of my colleague the Hon David Parker. I want to congratulate him on having this bill drawn. It is a very important bill. It is about minimum wages for people who are classified or known as being contractors. This should be a no-brainer, actually, for a civilised society. When we set a minimum wage for all New Zealanders who are in paid work—this bill is really going to be the expression of whether this Parliament believes that that should be extended to all people who are, in fact, in paid employment. What we have is a situation that certainly the Labour Party believes is untenable and unfair and not the sort of decent treatment that we believe all New Zealanders expect from a civilised society, and that is that people who are providing a service should be paid at least the minimum wage. For many New Zealanders that is not currently the case.
I want to give a few examples of the types of work that now fall into this category, because once upon a time when we talked about employees and we talked about workers it all used to mean the same thing. It all was basically a nine-to-five job and it was an employment relationship, but these days some of the work that was traditionally done in that way is being done by people who have no option but to do it as independent contractors. They have no option but to do it as independent contractors because that is the requirement of the person who would once have been called their employer.
People who deliver pamphlets are often employed in this way. This is obviously work. It is work that needs to be paid for, but far too often these people are paid less than the minimum wage because they are offered it as an independent contractor. They are given an amount of money to deliver X number of pamphlets, and depending on the terrain that they are working in or the weather or the nature of the pamphlets that they are delivering it might take them longer than was anticipated. When that is broken down hour by hour, sadly, it often means that they are being paid less than the minimum wage for that work.
Another example that is much closer to my heart, because it happens to be an area of work that is largely performed by women, is the area of home-based care—home-based care for the elderly, for the disabled, for the people who need to have personal cares taken care of in their own home environment. That is also an area that is predominantly, I would say, contracted out. It is done in this way where there is a care package that is contracted for and there is a certain amount of remuneration that is given to the people who perform that very important work. It does not really matter how many hours it takes them to perform that work; they will get just that same amount of money. For far too long in this country, here is what has transpired for that very important work. Because people have to travel to get to the homes to deliver the care, often, if we took from the time that they start their work at the beginning of the day to the time that they finish their work—if you broke that down as an hourly rate—those women were ending up getting paid less than the minimum wage.
So that is the importance of this bill. It would ensure that that could never happen—that however the employment situation is described, however the employment relationship is structured, we would always ensure, as we should in a civilised and decent society, that people doing all of that important work would at least get the minimum wage. I say “at least get the minimum wage” advisedly, because it is my belief that women performing that very important work in people’s homes—which actually requires a lot of mental energy, a lot of knowledge, and a lot of physical activity—should, in fact, be getting paid more than the minimum wage, but this bill will do for me for now.
The ASSISTANT SPEAKER (Lindsay Tisch): I call Andrew Bayly—at short notice—
Carmel Sepuloni: Wake up, National! Gee!
ANDREW BAYLY (National—Hunua): I am awake, thank you! What a great opportunity to talk about the Minimum Wage (Contractor Remuneration) Amendment Bill. I think we all share the intent of this bill, which is to try to look after the lower-paid members of our community. It is great from that perspective, but I think the reality of this bill is that it is deficient in a number of ways and, no doubt, many of our colleagues have talked about this. What I find interesting is when you look at the amendments to section 2 inserted by clause 6 and the definition of “principal, in relation to a specified person,”—we need to get an explanation around clause 6, which sets out that the principal has to apply this in a situation, and there are a number of specified services. Of course those are all set out in schedule 2. Many of those are fine and appropriate if you were to adopt that, but the interesting exception is in the definition of “principal” “(b) does not acquire the services for the person’s personal, domestic or household use or consumption.”
For many this bill imposes a number of additional requirements, primarily on the employer, and what I just want to draw your attention to is new section 4B of the Act inserted by clause 7—I have read the bill. The four additional tests, I think, are not particularly pertinent and impose a much higher cost. First of all, new section 4B states: “The following matters must be taken into account in establishing the actual rate of remuneration …”. The first of which is, obviously, “(a) the terms of the contract;”—that is fine. Second is: “(b) whether the principal and specified person have agreed on what is a reasonable amount of time …”. Third is: “(c) the information in the remuneration record [is] required to be kept under section 8B;”. And fourth is any other relevant information.
For full-time employees you have a contract, and if they are on a fixed basis all you would need do is to report in and make the necessary payments to the Inland Revenue Department. What this bill does is actually take the information requirements a whole lot further for those who would normally be regarded as casual employees. I am not saying that they are less important, but it just seems perverse that we end up imposing a much higher information requirement on employers to keep track of it. It is almost like the proponents behind this bill want to make sure that we have got a really good wrap around our employers, because the underlying assumption, which I do not believe in, is, in my view, that it is almost as though we do not trust any employer who employs someone on a contract basis. I do not think that is correct in today’s environment. There are of course poor employers but that assumption, which I think pervades this bill, is actually inappropriate.
The other thing is that clause 11, which inserts new section 8B, goes on about additional records to be kept. It talks about the name of the specified person, the postal address, kind of service, the hours, if remuneration payable at intervals the hours in relation to each interval, the remuneration paid to the specified person for the service and the method of calculation, and any other particulars. Again, it is getting into a level of detail that is simply not relevant and is probably inappropriate. I think, in the end, what we are trying to achieve with this is that we want to make sure that contractors who are legitimately employed by employers are not exploited. That is first above anything. Of course that is covered by their normal employment laws we already have in place. But the requirement to be overly prescriptive around how we employ these younger people—and I note that the bill proposes that that reduces down to age 16 and over—is in my view, just totally inappropriate.
What we really want to end up with is a fair exchange between an employer and an employee. We do not want to clutter it. We do not want to actually create a disincentive for employers to actually employ these types of people. I think on that basis that this bill is inappropriate and actually probably out of date, given all the substantial changes we have made to employment law in recent periods. So on that basis I oppose the bill.
DENISE ROCHE (Green): I rise to take a call for the Greens on this, the Minimum Wage (Contractor Remuneration) Amendment Bill. We will be supporting this bill, and I sincerely hope that it will pass its first reading and be referred to the Transport and Industrial Relations Committee. I congratulate the member of the House David Parker who has brought this bill here today through the ballot process.
I want to acknowledge the fact that this bill follows on very strongly from a previous bill that was brought to a previous Parliament by Darien Fenton, a previous Labour MP, who was actually my previous boss at the Service and Food Workers Union. That bill was very similar to this one, although this one makes a few more amendments to the Minimum Wage Act that would make it easier to investigate and enforce remuneration rates of the contractors who would be covered specifically by the clauses in this bill.
The Greens support an industrial relations environment that is fair to those who work and is fair for employees too. Unfortunately, what we see at the moment is a situation where the balance of power that is the employment relationship has been tipped more in favour of the employers and actually into a situation where bad employers have been given an incentive to exploit people. We have seen this Government deliberately and systematically undermine the rights of ordinary working New Zealanders and allow exploitative practices to flourish.
I will give you a few examples. The previous Labour speaker alluded to some of them. Just to recap, there are things like the introduction of youth rates, which means that young people can legally be discriminated against in their pay rates. There is the fire-at-will legislation that allows workers to be sacked for no reason whatsoever in their first 90 days of work, and, of course, there were the changes to the Employment Relations Act, which included things like the removal of the requirement for new employees to be offered the existing terms and conditions of a collective employment contract when they start the job, if there is already one in place. There is another one too. That was the removal of the protection for continuity for people like cleaners when their employer’s contract changes hands—Part 6A, it was. So those protections have all been eroded, if not removed. My point is that these were all vulnerable workers.
This bill is an attempt to try to ensure that another group of vulnerable workers have some minimum protections—that is, that they have access to the minimum wage. We see it time and time again where certain workers are exploited. They are taken on and called contractors, and I have seen it in my home community. I have seen it with a cleaner there who was in tears when she told me that she had to work longer hours, despite the fact that she was not being paid any more money, because she was a contractor. This is a woman who had to wear the logo of the employer, who had to wear the uniform of the employer, who had to go where the employer directed her, and had to work the hours that the employer told her to. Her wages were halved as a result of the employer saying that her contract needed to include more work. She was also responsible for paying her own tax, for paying her own ACC, for providing her own cleaning equipment, for providing and buying her own uniform that she did not actually want to wear because it was her employer’s, not hers, and she was also responsible for her own health and safety.
We are seeing this more and more. The previous Labour speaker alluded to the issue that is happening with home-care workers, where they are frequently being told that they are not employees and that they are contractors. It is about time we stamped out the exploitation of vulnerable workers, and this is one step towards it. We support this bill.
Hon MAURICE WILLIAMSON (National—Pakuranga): I am happy to say from the outset that the National Party is not going to support this legislation. That is not to say that we are not sympathetic with what the intent is. It is the fact that this is one of these pieces of legislation that when you look at what was intended and what it will actually do, they very, very much part company.
This legislation also comes under the category of the old Steve Maharey principle. There will be a lot of new members here who do not remember Steve Maharey, but he was a Labour Minister and he had this wonderful saying: “Oh, that’s what you say when you’re in Opposition. That’s what you say when you’re in Opposition; not what you do when you are in Government.” The Maharey principle was when you are in Opposition you do it; soon as you get into Government, you say: “Oh no, there’re good reasons why we don’t.” In fact, this legislation is the other way round. This is sort of the Steve Maharey principle in reverse. When Labour was in Government, it did not want to do this. When Labour was in Government and Darien Fenton wanted to do it, Ministers on that side—including David Parker, a Minister in the Labour Government—said: “Actually, this is a piece of rubbish and we’re not going to have anything to do with it. Best thing you can do, Darien, is put it up as a member’s bill.” They made her do that, hoping that it would never get drawn from the ballot—absolutely hoping against all hope that it would never get drawn from the ballot—because if they had supported it, if they had thought there was merit to this, if they had thought that, they would have done it as a Government bill and they would have put it through.
They knew right from the outset that it was rubbish and David Parker knew that, and now, when Labour is in Opposition, here is the Steve Maharey principle: “Let’s go in and try to make out we are on the side of these people. Let’s make out that we think this is a wonderful thing to be doing.” The question that anybody out there should be asking themselves, if they truly think Labour believes in this nonsense, is: why the hell were you not prepared to back it when you were in Government? They were not, they did not, and they would not, and that is a fact. [Interruption ] You can have all the catcalling from the other side that you like. Labour would not do it. Labour’s Ministers would not allow it to go through as a Government bill—they would not.
So officials have been telling us that this will not work, that the risks dramatically outweigh the benefits of doing it, and that it would not achieve the goals. In fact, there are some quite perverse little fish-hooks in this legislation that might actually see a contractor, if they were put on to the minimum wage, have things that were adverse to their income as compared with a worker on the minimum wage who will get all sorts of weighting with regard to their holiday pay and their sick pay and so on.
So we are not prepared to support the bill. As I said before, there is nothing wrong with the intent. But I have to say that I am one of these members of Parliament—I am happy to put my hand up—who has got real nervousness about the idea that a minimum wage law will fix things. If that was the case, we could get China to implement New Zealand’s minimum wage laws in China. What that would do is have 1.3 billion wealthy Chinese—no, actually, it would not; it would have about 99 percent unemployment in China because you cannot just fix wage levels without the economy actually generating jobs that are real jobs, which are able to pay at that level, etc., etc. So when contractors are out there working—and remember this: sometimes contractors are able to deduct a whole lot of expenses as they are doing their business. If they are contractors using equipment or vehicles, they can have a totally different tax regime to a worker who is just being paid a wage and salary. So to try to say that we are going to put them on the exact same regime does not make sense.
David Parker knows that. He would have got that advice when he was a Minister in Cabinet. He would have got that advice. His Cabinet would have sat—
Hon David Parker: No, no.
Hon MAURICE WILLIAMSON: Yes, he would have—I know him. In fact, if he was asleep at the wheel that is his problem, but the officials would have been telling their Ministers that stuff. I absolutely agree with the officials’ advice on this bill. This is one of those pieces of legislation where, if you just, on the surface of it, say to some people “How about someone who goes out delivering pamphlets or who works under a different regime from waged workers—how about they get the same pay as the people who are just waged workers and getting the minimum wage?”, you know, on the surface of it most people would say “Oh, yeah—sounds sensible.” But as soon as you, and the devil in these things is always in the detail, get into understanding what a contract worker is and the terms and conditions and their ability to claim certain things that the worker cannot—and, by the way, the worker earns some things that a contract worker does not. When you are a contract worker you are not getting sick pay and annual leave grossed into your pay, and so on.
There is a really good example that officials worked up for us. I am not going to try to go through it now—
The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.
CLAYTON MITCHELL (NZ First): I have to say that I know the real reason why Maurice Williamson will not support the Minimum Wage (Contractor Remuneration) Amendment Bill to go to select committee. It is because it would go to the Transport and Industrial Relations Committee, and we know how work-shy you can be sometimes, Mr Williamson. So I understand your standing up and being opposed to this coming on. We have also in the Transport and Industrial Relations Committee gone through a very long-winded process to get the Health and Safety Reform Bill put together, but that is the real reason. If you are going to be honest, mate, you should just say it, nice and loudly. I would like to, while I have got the floor, commend David Parker for bringing this bill forward and putting it in as a member’s bill. But, more important, for the first time in 10 years, I believe this is the first opportunity he has had to have his bill pulled out and called. So congratulations.
Hon David Parker: 13 years.
CLAYTON MITCHELL: Thirteen years—goodness me. That is a big deal in itself. New Zealand First will support this bill to the select committee. I think it is very important that we actually hear from submitters about the concerns they have. I see Mr Bayly nodding in agreement, which would say that we want the work in our select committee do we not, Mr Bayly? He is nodding in agreement, but of course his party is going to vote it down, which means that it is going to go nowhere, back into the ether.
This bill is really, on the surface of it, about getting a fair day’s pay for a fair day’s work. That is what it comes down to. We have got to look after our workers to ensure that they are actually getting remunerated fairly for the work, time, effort, and energy that they have taken to do the job. They have got to get paid and remunerated properly. We have some reservations with the bill, Mr Parker, I have to say, and there is a little bit of trepidation, but I believe that through the select committee those little areas can be ironed out. I will particularly just bring your attention to probably three of the areas in the contracts for service department that you have alluded to, out of the 14 that have been listed in the bill, and that we have some reservations about—in particular, and I know that Ms Moroney mentioned it, to do with pamphlet deliveries.
Understanding how pamphlet deliveries work, and having been a young man once, when I used to go out there and deliver those pamphlets myself—
Sue Moroney: Still young.
CLAYTON MITCHELL: Thank you, very much. I will take that as a compliment, Ms Moroney; I am still young. But the reality is that this is a job that is designed for young people before school, after school—doing newspapers, handing out those flyers. Goodness me, when it is electioneering time who are the young people who come around to your neighbourhood to put those flyers in your box? Some people, I am sure, would like to see that practice be removed, because you see all the “No circulars” signs. The whole point is that a big sector of that market is done by young people. The other people who are actually filling this void are the elderly. Elderly people are taking up this job—some in their 70s, some in their 80s, and some in their 90s, whom I have been speaking to—and take, sometimes, 4 days to go and deliver pamphlets quietly. They take it as a social engagement outing—a little bit of social intercourse with their neighbours by getting themselves around the neighbourhood to go and deliver those pamphlets. So what is reasonably expected of them if, all of a sudden, the pamphlet-delivering companies have to say: “Well, look—I expect this job to be done in 2 hours. You’re going to take 4 days to do it.” They will miss the opportunity to get employed—to get gainful employment. That is the reality of the downside and the unintended consequences of the bill, which will have some dire effects on the people who actually work.
Hon David Parker: Not for you. Under-13s.
CLAYTON MITCHELL: No, well—youth will continue, but what will happen is that the youth will continue to pick up that void. This is a great opportunity for elderly people within our communities to get these jobs that children and young people on their pushbikes can go and do in 2 hours, and the elderly take 4 days to do them. That will actually remove them from being eligible to work because of course it will not be financially viable for those pamphlet companies to employ them.
The other area that we have some concerns about is public entertainment services: actors, musicians, and singers. The reality is that—and emerging artist I am not, but many of my friends are—the best way to get yourself out there is to give your time and be support to some of those up-and-coming bands. The reality is that the likes of the Wellington musical theatre and the operatic societies give gainful employment and pay less than the minimum wage, but they pay for costs and some of the time that is spent. We could not afford to have that industry. The industry would actually go to sleep and disappear into the ether. We are not big enough to say that we can afford to pay a minimum wage to everybody who is working in those sectors of the market. A lot of them do it for love, a lot of them do it for practice, and we need to be very mindful of that.
I just want to finish off by saying that the manufacturing of clothing, footwear, or textiles is another area that we have concerns with. All the other areas we actually support you on, particularly around pizza deliveries, truck driving, etc., etc. I am getting the hurry-along—5 minutes is not long. Thank you; we will support this bill to select committee and we look forward to ironing out some of those unintended consequences.
SARAH DOWIE (National—Invercargill): I rise in opposition to this bill, being the Minimum Wage (Contractor Remuneration) Amendment Bill. Look, I like to think of myself as pretty centrist on the spectrum but, as we have heard in previous speeches, this is just an impractical bill. We have heard from officials that the risks outweigh the benefits, and this bill will certainly not achieve its goal. At the end of the day, contractors can often write off their own expenses—they like the flexibility that the law provides around that. It is about the structure of employment that is suitable for that worker.
This is a Government that supports measures that are going to grow the economy and give that worker the flexibility to go into business, to get into work, and to choose the structure by which they want to operate. With regard to some of the things that the Government has put in place to grow the economy—and I heard one of the Opposition speakers talk about measures that she thought were exploitative—well, I can talk about the 90-day work trial period. That has worked extremely well in Southland, especially in the agricultural sector. It has allowed people a chance to get into work—to achieve their hopes and dreams by convincing an employer to give them a chance. They have entered into these employment relationships and have had that opportunity to work hard and prove themselves and to get into employment. It is the same with the youth wage. Not everyone is going to take a chance with youth, but the youth wage allows these people to get into work—
Andrew Bayly: Worker participation increasing.
SARAH DOWIE: Exactly—worker participation is increasing. That is a good thing. People are getting into work, and what does work do? It brings people out of poverty and helps them achieve their hopes and dreams. This is an economy that has been growing. In the past 4 years it has grown at 2.6 percent and Southland is no different. In Southland things are going extremely well, notwithstanding, obviously, the drop in dairy prices, but we have got other things going on there. There are other industries that are growing. You can look at tourism, aquaculture, whatever—manufacturing, international education.
But I want to just move on to New Zealand Aluminium Smelters. Obviously, we are quite relieved that the smelter has achieved a deal with Meridian Energy and has got that deal on the supply of electricity across the line. And what does that mean? Well, the smelter employs—
The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break. This debate is interrupted, and I shall resume the Chair at 7.30 p.m.
Mr DEPUTY SPEAKER: Kia ora mai tātou. Tēnā tātou katoa. The House is resumed. When we paused for the dinner break Sarah Dowie had 2 minutes remaining to speak, which is available to her.
SARAH DOWIE: I would very much enjoy taking the rest of the 2 minutes available to me to speak on the Minimum Wage (Contractor Remuneration) Amendment Bill. Where I left off, I was talking about how it was wonderful down in Southland to have Tīwai Point, New Zealand Aluminium Smelters across the line, having reached a deal with Meridian Energy as to the power costs. That smelter is directly attributable for 1,000 jobs, direct jobs, in the community and 3,000 indirect jobs. Could you imagine if there was extra cost put on those contractors? Most of those indirect jobs are contracting jobs. If there was extra cost put on those contracting jobs we would see the unemployment rate escalate and the participation rate in jobs go down. That would not be good for Southland given that we generate over 15 percent of New Zealand’s total export receipts.
We have a fantastic reputation to uphold and we want to do so by taking up the measures that this Government has put in place. They are practical measures to keep the economy growing and to move people into work through such measures as I have already mentioned—having firm written terms and conditions in an employment contract, 90-day trials, and having youth wage rates to get people into work—rather than making the employment regime more rigid. We want to keep people moving through into work, achieving their hopes and dreams, and moving out of poverty. It is with that that I say that this bill is one that is not practical. The risks outweigh what could be some benefits and that is certainly something that has been communicated through the officials and, therefore, I do oppose this bill.
JAN LOGIE (Green): Tēnā koe, Mr Deputy Speaker. The Green Party is very pleased to be able to support the Minimum Wage (Contractor Remuneration) Amendment Bill. I would like to acknowledge and thank David Parker for getting this bill drawn—his first in 13 years, I understand. They say good things take time. The Government, sadly, though, has already indicated that it will not be supporting this bill. For a party that says it is about addressing child poverty, a party that says it is about a strong economy, and a party that says it is sympathetic to the intent of this bill, I am struggling to understand why it cannot at least support the bill’s referral to the select committee.
The arguments that I have heard so far from listening to the members on the other side of this House are pretty much that it would create too much paperwork for business and, well, that would be a disincentive for employing people. That really is an indication of where power lies in this country. Earning less than the minimum wage is not stopping people taking those jobs at the moment, because they are desperate for work, and, of course, with more and more people being required by Work and Income to take these contracts, there is no choice. That is OK in our country—that people are paid less than the minimum wage for skilled jobs. Yet, on the other hand, a bit more paperwork for employers and the Government says: “Hold on. That is not right. We cannot support that.” I think there is a bit of a power problem here.
We have also heard from the member Sarah Dowie that employees need flexibility, which is why we should not support this bill. I am really not sure when flexibility included wanting to be paid less than the minimum wage. She also said that work brings people out of poverty. Again, I think she is missing the point of this bill, which is to try and make that true. Sadly, that is not true at the moment because so much work is short-term, part-time, contract work that is paid below the minimum wage—precarious work on very low wages. We know that two out of five children in poverty in this country are living in families where their parents work.
Work is not a pathway out of poverty in this country with the way our employment laws are. This bill is a chance. It is not going to fix that problem, but it sets a pretty basic standard so that when we say “minimum wage”, that is actually what we mean and we deliver on. The Green Party believes that as a condition of a decent society, people should be able to get a fair wage, a living wage, for their work, and that we as a country should be actively seeking to eliminate structures that perpetuate discrimination and inequality.
I am very pleased to see home-care workers specifically covered by this bill, because this is an area of massive exploitation in this country. It is a largely female workforce, a workforce with many Māori, Pacific, as well as migrant workers. It is a skilled and physically and emotionally demanding job with a huge amount of trust and responsibility in the hands of those workers. It is clear that it is so poorly paid only because caring work has traditionally been considered women’s work and therefore outside of the mainstream economy. We do not live in the 1950s any more. These women deserve to have their pay packet reflect their skill and value. The minimum wage goes nowhere near achieving that goal, but by God it is an absolute bare minimum that this House could deliver on.
The Government has been tipping employment policy and law framework more and more in favour of the lowest common denominator employers. It is time that stopped. The Green Party is pleased to stand and offer our support to a bill that will make a difference to the working poor in this country. Kia ora.
Dr PARMJEET PARMAR (National): Thank you, Mr Deputy Speaker, for the opportunity to speak on the Minimum Wage (Contractor Remuneration) Amendment Bill, in the name of the Hon David Parker, in its first reading. I acknowledge the effort of the member to bring this bill before the House. I also note, as mentioned by previous speakers, that this is a reproduction of a previous Labour member’s bill.
I oppose this bill because I believe that the entitlement to the minimum wage is only for employees. Contractors are like businesses. They do their job in their own time. They decide the amount of payment they should receive for delivering their services. And not just that; they also decide the time frame in which they will deliver their services. They work their own hours and they can even have people assisting them to finish their contract. They enjoy huge flexibility. They could be working for one business or entity, or they could have multiple contracts at the same time, whereas employees are required to have a much higher level of commitment in terms of the number of hours they work, the number of days they work, and the number of days off they can have.
To me this bill is saying that all business people should be entitled to the minimum wage, which to me sounds like we are underestimating our innovative people, who take the risk and start up their own businesses. People become contractors because they believe in their ability, and they believe that there is demand for the kind of service that they want to provide.
Contractors set their own terms and conditions when they go to work on a contract basis. Once that contract is finished, there is no ongoing expectation from them. If this contractor business is run by just one person, it is easy to establish. Another thing to keep in mind is that there is no one supervising the number of hours that contractors put into the work they have taken up. So it is totally up to them. They have to come up with the number of hours. They do their own calculations, put their margins on, and then decide the payment and also the time frame in which they will deliver those services.
Contractors enjoy greater independence, and also there is a greater perceived level of income security when compared with traditional employment. They work the hours that suit them. Employees have a fixed number of days they can have off every year. If they take more days off, then they have to go without pay. But for contractors, if they take more days off than they originally estimated, there is no reduction in pay. On the other hand, as the Hon Maurice Williamson mentioned, there is no holiday pay. If we put contractors on the minimum wage and compare that with casual employees, the casual employees get holiday pay; contractors will not get holiday pay. If we take into consideration ACC levies, then contractors on the minimum wage are going to be worse off when compared with casual employees.
Contractors are not bound by the timings or the rules of the workplace to which they are providing their services. They are like their own businesses. As I said, contractors can even hire people to assist them. But employees cannot do that. If traditional employees try to hire someone to assist them, then there is the risk that they will lose their job—and that means they are not capable.
Contractors can also decide the flow of income. Contractors can decide to have 50 percent, 70 percent, or 80 percent of an amount paid at the start, as soon as the contract is signed, and then the remaining payments will be made in instalments as the work progresses. They can control the flow of income, whereas employees cannot control the flow of income. Contractors are contractors because they like to work in a non-employee capacity. They do not want to work as employees. They believe in their services. They know they can do better.
Carmel Sepuloni: Contractors are contractors—wow. Far out.
Dr PARMJEET PARMAR: Yes, people become contractors because there are financial and non-financial benefits. Those people who are contractors are not there just for financial gain; they are there for the non-financial benefits as well, which they enjoy and which I have already spoken about. I do not see this bill achieving anything for anyone. Actually, it is going to make the financial conditions of contractors worse. I oppose this bill. Thank you.
Hon DAVID PARKER (Labour): Can I thank members for their contributions, can I encourage members to vote for this bill to go to the select committee, and can I take the time to deal with some of the issues that have been raised. Before I do that, can I say to the National members that if this bill does pass its first reading and goes to the select committee, why not try to make it work, rather than try to demolish it? There are many countries that have a minimum rate of remuneration rather than a minimum wage. If you only have a minimum wage, people can get around it and can abuse the most vulnerable in society by not paying them fairly. That is all this bill tries to do. It does not apply to everyone in society. It applies to a discrete list of occupations where these problems are most prevalent.
Mr Clayton Mitchell said that we need a Zimmer amendment for people who are over 90 who cannot deliver pamphlets fast enough. There are already provisions in the law that say that if people cannot work in a way that would enable them to work as people normally work, as a minimum they can get a special rate of pay. That is already provided for. That, for example, is how people who have a disability are paid lower than the minimum wage if they are not of normal capacity.
I have already noted that the world is becoming a more ruthless place. This bill, contrary to what the last speaker, Parmjeet Parmar, said, does not give contractors a rate of pay that would include holiday pay or sick pay or ACC levies. It just says that the minimum hourly rate can be no lower than the minimum wage.
I thought that Clayton Mitchell raised a good issue in respect of what you do with this interface with something that is almost volunteering when compared with work—like people who are putting on an amateur dramatic production. Well, of course, if they are just getting their expenses recovered, that is not actually getting paid, so that is not a complication. But if there is a complication around that, and it is too hard to fix in this bill, strike it from the list. I am not actually trying to cure all of the world’s problems here, but I am trying to make things better.
The reference to young people under the age of 16 is mistaken by people. People who are under the age of 16 do not get the minimum wage. This bill would not change that. This bill would not affect kids who are out doing milk runs or paper runs. It is aimed at adults who, because of the increasingly competitive and ruthless world that we live in, are being abused by being paid less than the minimum wage. Why is that fair?
Newspapers compete against people who are selling advertising services. Newspapers are generally large organisations. They actually do not employ people through these arrangements. They are either employing kids or they are employing people properly and paying them the minimum wage. If they are competing against other advertisers who are not paying the minimum wage, that is not fair to them. It is undermining their competitiveness, and that is just too tough.
Can I deal with one of the speeches earlier that said if someone offers to paint a fence and then it gets washed off in the rain or something and they have got to do it again and it takes them twice as long and they drop under the minimum wage—look, this is not intended to address that sort of situation. This is intended to address the situation of people who are getting around the minimum wage by employing people on something that is similar to a wage and similar to an employment relationship. These sorts of things are more frequent now, in part because the Government passed poor legislation relating to The Hobbit . It deemed employment relationships to be contractual relationships even when they were employment relationships, which is bad law. The Government should not have done that; it has actually made this problem worse by doing so.
I do not know what the outcome of this vote will be. I know it will be close. I think this bill is worthy of consideration by the select committee. I do not accept the assertions from the other side that I am somehow being doctrinaire in trying to drive up the minimum wage. I am not. I readily concede there is a proper argument to be had as to whether the minimum wage should go up or not. That is a separate argument. This does not increase the minimum wage for everything. It just means that some people in New Zealand who are currently being abused and not even being paid the minimum wage would get it.
A party vote was called for on the question, That the Minimum Wage (Contractor Remuneration) Amendment Bill be now read a first time.