The ability to work from home, wherever in the world this may be, is here to stay. In some small way, it's the silver lining to a difficult pandemic, which forced people and companies around the world to experiment with a form of work that may have felt uncomfortable, or not feasible previously. And now that employees have tasted the flexibility that working from home brings and they have proven they are able to execute, there is no turning back.
Statistics from around the world are demonstrating a reluctance from people to go back to working from offices five days a week. Working from home has allowed them to make significant life changes such as moving away from big cities and being closer to nature, relocating back to their home country, getting a pet, being around their family, keeping the promise of being home for dinner and many others.
If in the first six months of the pandemic, working from home was an emergency measure to stop the spread of Covid-19, it is now becoming an essential measure for sustaining a somewhat grounded life in a world that is in flux. But it has to be done right. There are two main sides to that:
Understanding and complying with local regulations, tax breaks and allowances related to working from home.
We are excited to start a new series of posts, which looks at the WFH rules, regulations as well as tax breaks and allowances around the world. We kick off with a guide on working from home in New Zealand. (If you need to find out about any other employment, payroll, tax or legal regulation in New Zealand, have a look at our comprehensive country guide).
The New Zealand working from home landscape
There are several reasons why New Zealand is well-positioned for working from home. As of late 2019, over 900,000 households are connected to fibre internet, with broadband being more affordable than ever. New Zealand has the 22nd fastest internet speed in the world with an average speed of 101 Megabits per second (Mbps). (Internet speed at home is something crucial for fully remote companies. At a recent People Ops meetup about remote employee onboarding, the Head of People at Respondent, Kat Myers mentioned that the company asks all its new hires to have at least 50 Mbps).
At the same time, New Zealand is struggling with the density of employment in its capital Auckland. Well paid jobs outside it are scarce and force Auckland to be overpopulated, with people having to commute long or have very high living expenses.
At the height of the Covid-19 pandemic, 2 out of 5 Kiwis worked from home, and as the situation improved, 42% of the working population continued to work from home. Even when the country went into the lowest Alert level in the second quarter, 36% of workers continued to operate from home. Employees are currently being encouraged to go back to offices, but many still prefer to continue to work from home.
So New Zealand certainly has the potential and ability to grow its working from home base. But how do local regulations help?
A right to ask for flexible work arrangements
Even before Covid-19, employees in New Zealand had the right to request working from home, regardless of the length of their employment. If an employee is asking to work from home, their request should:
Outline the flexible working arrangement they would like to be considered
Give reasons for wanting to work flexibly
Explain what specifically they are looking to change
Explain, in their view, what impact the flexible arrangement may have on the business and include ways in which this could be mitigated
The employer has to reply to the request of working from home within 21 days. If they agree to it, a trial of the arrangement may be the first stage before it's formally agreed. If, however, the employer declines the request, they must present a good business reason for it.
Health & Safety when working from home in New Zealand
When working from home in New Zealand, an employees' home is considered a workplace. Therefore there is a shared responsibility between the employee and their employer under the Health and Safety at Work Act 2015 to eliminate or minimise any health and safety risks. This means that it should get the same health and safety risk assessment as an office. This includes ergonomics of the workstation setup, fire safety equipment, and first aid kits.
Here are some things employers should consider when supporting the wellbeing of their employees and managing health and safety risks when working from home in New Zealand.
Think about the things that could harm an employee while working at home
This could be things like their workspace set up, electrical wires from a laptop, or loss of social interaction with the team. Also consider risks and specific protocols for distancing and social isolation. Everyone will be different, so take the time to think about each member of your team.
Talk to team members about these things and get their view
Team members can help identify the things that may cause harm and assess the level of risk around this. For example, team members may have care responsibilities at home to manage while working and may need to discuss a flexible work arrangement, or some may require more support with setting up their workstation.
Work together to manage these
It may not be possible to put in place the ideal set up straight away, so work together to identify the best way to manage these in this situation. For example, set up the dining table with a secure makeshift stand to raise height, tape down electrical wires, schedule in daily team video-calls.
Check-in to see how these are working
Once you have worked together to identify the things that could harm the employee while working from home and put in place something to manage these, check-in regularly to see how these are going. You may want to schedule in a regular catch up to discuss any issues with things like their desk setup or how the employee is feeling being away from the team. Ensure team members know how to report any incidents or concerns.
Take action if there is an issue or an employee raises concerns
If your team member is having problems or raises a concern, work with them to identify a way to address this. For example, if they are getting back pain from working at their dining table, can they alternate between sitting and standing at the kitchen bench? Or could they take regular exercise/ stretch breaks?
Employers are responsible for talking through and developing policies on how employees should manage their health and safety when working at home.
Appropriate working conditions
Employees may not have the ideal equipment, systems, or set up straight away, so managers may need to support them to find short-term alternatives.
Employees working from home need to consider and ensure they look after their Health and Safety, which includes their own physical and mental health. To meet their responsibilities under the Health and Safety Act 2015, employees should:
Have a suitable workstation, including a desk and office chair
Ensure the work area is free from distractions or confidentiality issues
Take all reasonably practicable steps to ensure their safety while working from home. This includes any hazard management and reporting
Install work equipment correctly and use it in the manner it is intended for
Take all steps to keep any company equipment or technology safe and without damage
Make sure lighting is suitable and sufficient
Manage their time effectively and take appropriate meal and rest breaks, as per the terms of their employment
Take steps to manage the risks that come with working alone such as scheduling regular meetings and catchups with the team to avoid isolation
Notify line managers immediately for any sickness or work-related accidents
Have access to a first aid kit
Keep well hydrated
Switch off their work devices at the end of the workday
Go outdoors and exercise daily, if possible
As comfortable as sitting on the couch may sound, it can increase the risks of developing discomfort, pain or injury (DPI) and can lead to musculoskeletal disorders. Setting up a proper workstation is essential for preventing any injuries. Here are some tips on how to do that:
Use a good chair. Have your chair close to your desk to avoid reaching. Raise your chair if your arms are too low, and you find you are raising your shoulders
Make sure your monitor is placed directly in front of you, with the top of your monitor positioned at your eye level. The keyboard should be directly in front of your monitor
Use an external keyboard and mouse if you are using your laptop
Your feet should be flat on the ground. Use a footrest if you need to.
Try to ensure your arms are supported. If the arms are not supported, your neck and shoulder muscles can become fatigued.
Do not slouch. Make sure your set up has you sitting upright, and your shoulders and arms should be relaxed.
To support their mental health, employers should encourage employees to talk about how they are feeling, to practice self-care, and to reach out for support. Establishing regular communication with the team about how they are coping and adjust workload, work responsibilities, and work times if needed.
We strongly advise that you implement an Employee Assistance Program (EAP). Usually formed by practitioners, counsellors and psychologists, they provide a range of confidential services available to employees that promote positive work communities and help employees maintain a healthy lifestyle and resilience.
Security of information
Employers should talk to their team about how to follow privacy and security requirements for the type/classification of information they are allowed to access when working at home. All security policies that would apply to employees who are working in the office, also apply when employees work remotely from their homes. Employees may need to adjust the work they do or take extra precautions to protect information, such as physically locking devices and information away if not in use.
Employees should keep all work information safe and secure and avoid using public WiFi networks.
How the tax treatment of working from home is evolving during Covid-19
Similar to many other countries, at the onset of the Covid-19 pandemic, the New Zealand government instigated a work from home guidance for all workers who could do so. Alongside that, they also introduced several tax allowances and breaks to accommodate the fact that so many people were moving to work arrangements they may have been unprepared for (lacking the proper setup, incurring much higher utility costs at home, etc.). These were initially introduced for just six months, but have just been extended for further six months, until March 2021. They are as follows:
If employers decide to pay employees an allowance to cover some of the extra expenses they incur, the first $65 a month is exempt from income tax if the following requirements are fulfilled:
The payment is for an expense that the employee has had or is likely to have in the future, which is directly related to their employment
The expense is necessary for the performance of the employee's job
They have paid for the expense from their employment income
Expenses could include:
electricity or other utility costs
telecommunication tools and usage plans
home office furniture or equipment
If these requirements are satisfied, the payment will be:
tax-free for the employee
not subject to PAYE
deductible for the employer
Allowance for home office equipment, which the employer can claim as a tax deduction in two ways:
Safe Harbour - under this option, an employer can deduct up to $400 of furniture and equipment costs. The employer does not have to explain what the cost is for precisely or whether the equipment is solely for work usage or whether there is some personal use as well. Filing an expense under the Safe Harbour option will, however, prevent them from the option of claiming any other costs down the line.
A reimbursement - under this option, there is no limitation in the amount that can be spent on the equipment; however, the employer will need to show the exact extent to which the equipment is being used for work purposes by the employee. The calculation of the final exemption will be based on the percentage, which is why the employer will need to know the exact cost of the asset.
Furniture and equipment are usually seen as assets with low value. This is important because for accounting purposes their depreciation cost equals their actual cost. There has been a significant change in the price tag that grants an asset a low-value status. Before March 17th, 2020, that used to be a maximum of $500. After March 17th 2020 (and before March 17th 2021), it has been changed to a maximum of $5,000. After March 17th 2021, the threshold will decrease to $1,000.
We hope this guide to working from home in New Zealand has helped you to understand the lay of the land. If your company is outside New Zealand, and if you want to employ someone there, you will have to comply with all other employment laws and regulations, as well as run local payroll. You can read more about that in our comprehensive New Zealand country guide. Setting all that up may take upwards of six months and will require a lot of resources.
Alternatively, you can work with Boundless, to help you with all the work related to legal employment. We own and operate a New Zealand Professional Employer Organisation as part of our multi-country offering, which currently includes Ireland, the UK, Portugal, Germany, The Netherlands, Singapore, Australia, Denmark and Estonia. Through the Employer of Record model, we act as the legal employer to your remote workers, take care of payroll and taxes, and adhere to the various employment law obligations. Learn more.
The making available of information to you on this site by Boundless shall not create a legal, confidential or other relationship between you and Boundless and does not constitute the provision of legal, tax, commercial or other professional advice by Boundless. You acknowledge and agree that any information on this site has not been prepared with your specific circumstances in mind, may not be suitable for use in your business, and does not constitute advice intended for reliance. You assume all risk and liability that may result from any such reliance on the information and you should seek independent advice from a lawyer or tax professional in the relevant jurisdiction(s) before doing so.
Written by Irina Dzhambazova
Irina Dzhambazova is the editor of this publication and leads many of the marketing efforts behind Boundless. Previously she crafted stories at SaaStock and Dublin Globe and travelled the world capturing case studies of companies using the Kanban Method. Throughout this experience, she was almost always "the remote worker" and knows a thing or two about the potential and challenges of this way of working.
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