It’s tempting to jump at the offer of a job right away and skim-read the contract, especially if you’re a new graduate and this is your first foray into your industry. But there are some key things to look out for before signing on the dotted line. Noticing what’s written — or what’s not — allows you to bring up any questions you might have with your potential employer before starting a new job.
What’s in a contract?
Put simply, a contract is an agreement between you and your employer that agrees on your pay, working conditions and hours. When you’re given a contract, consider whether the pay rate, tasks and hours are what you expect, and note the date they intend you to start working. There might also be conditions before you start your employment, such as a police check. Be aware of what kind of worker you’re being employed as, too, are you a permanent employee, fixed term, casual or contractor?
Things to look out for
Employers can use trial periods to find out if you’re suitable for a job. They can be for up to 90 days, but your contract must stipulate just how long. A trial period means your employer can dismiss you and you can’t raise a personal grievance for unjustified dismissal. It also pays to know that only businesses with 19 employees or fewer can use the trial period.
Performance bonuses or incentives are paid in addition to your base wage/salary. Usually they’re linked to agreed performance measures, so the amount of the bonus you earn will depend on your performance throughout the year. For example, a bonus might be paid for meeting sales targets. Read bonuses outlined in your contract carefully. Make sure the payments are clear with regards to how they’re calculated. Bonuses should relate to a formula where both the employee and employer can look at the numbers and work out whether a bonus is payable. Frequent and regular bonuses are treated as part of your earnings and have PAYE deducted, whereas a one-off bonus (like an annual bonus) is treated as a lump sum payment.
Restraint of trade clauses
Restraint of trade clauses are triggered at the end of a contract. They prevent you from working in similar businesses in a way that may affect your former employer’s business. Basically, the clauses are designed to protect a business’ commercially sensitive information. Usually the restrictions are limited to a specific geographical area and only last for a specific period of time after the end of the employee’s work. Clauses like these can be refined, though, and be made more specific if need be, just ask your employer. Check for restrictions, too, on whether you can contact or work with the employer’s clients after you finish your contract; some contracts will stop you from doing this for a period of time.
Your contract might include your company’s policies on working overtime. Some employers will pay a greater hourly rate (like time and a half) when you work outside the normal working week of 40 hours. But be aware there’s nothing in law requiring employers to pay extra per hour.
Work on the side
There’s no general rule in New Zealand preventing a person from having more than one job at the same time. Having more than one job might mean working for a second employer or working in your own business. However, look for any notes in your contract regarding working a side gig or second job, particularly if they’re related to the industry you’re going into. An employer must have a reason based on reasonable grounds if they want to stipulate in a contract that you can’t work for another person, or need your employer’s consent for such work. This reason must be stated in your contract.
Has your place of work been specified? Check if you’re agreeing to work in a wide geographical area or offices in different locations. It may seem obvious, but people have been caught out before, not realising they were expected to work across different locations.
Holidays and sick leave
Minimum rights (like the minimum wage and annual holidays) are legal requirements and apply even if they’re not in your contract. Your employer can’t reduce these or trade them off for other things. Be aware that all employees are entitled to at least four weeks of paid annual holidays after 12 months of continuous employment. Once you’ve worked for your employer for six months, you’re entitled to at least five days paid sick leave each year.
Negotiating your contract
Remember that you have every right to ask for any alterations you feel are necessary to your contract. Many employers say they would have paid new staff more if they’d been asked to, according to careers.govt.nz. So it’s worth trying to negotiate higher pay, extra leave or training before you accept an offer if you feel the need. Also make sure any promises discussed in an interview, like travel or use of a vehicle, are included in your contract. It pays to get it in writing.
Once you’ve signed: banking and KiwiSaver
You’ll send your new employer financial details like your tax code and what bank account your salary should be paid into before you start. Consider what current bank account you have and whether it might make sense to open a new one before you start your job.
Signing up to KiwiSaver is entirely up to you, but it’s definitely worth considering as there are a lot of benefits. You can choose a contribution rate that is comfortable for you and your finances. The current contribution rate options are 3%, 4%, 6%, 8% and 10%. They’ll be deducted from your salary before tax and transferred into your KiwiSaver fund of choice (or default scheme if you haven’t actively chosen one). Your employer will contribute an additional 3% if you’re a member of KiwiSaver. If you’re not currently in KiwiSaver and want to join, or would like to explore the benefits of switching schemes, click below to compare your options with Canstar.