3 Sep 2019

Payroll firms say they've been shut out of Holidays Act taskforce

12:57 pm on 3 September 2019

An overhaul of the Holidays Act to stop thousands of people being underpaid is being called unfair and negligent.

Finance - coins, calculator and table of figures.

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A government taskforce is in the final weeks of reviewing the legislation but payroll companies say they are being excluded and their advice has been wilfully ignored.

Emails released to RNZ from payroll companies to taskforce officials show the industry says the mess created by the complicated law cannot be fixed without more consultation.

The taskforce, announced in May last year, has objectives which include consulting widely and working closely with technical experts such as payroll providers, business rules specialists, and service design and delivery specialists.

In March this year the Ministry of Business, Innovation and Employment (MBIE) told one company "the taskforce is actively considering its plans for further consultation with payroll providers". Individual companies are not identified in the documents.

But a payroll company emailed officials on 2 August: "On several occasions we have been told that our offer to be involved was appreciated, and that we would be consulted and involved at the appropriate time."

Payroll providers have instead been invited to attend two-hour workshops to discuss the draft recommendations and give feedback on how the proposals could work within New Zealand payroll systems.

This left just two weeks for feedback and made it "extremely unlikely that any meaningful feedback could be achieved", a 5 August email by one provider said.

Taskforce chair Professor Gordon Anderson has defended the approach.

Calling on companies earlier "would have meant asking for feedback on a wide range of undeveloped options, many of which have since been ruled out by the taskforce. This would have been a waste of payroll providers' time", he said in a statement released by MBIE.

Prof Anderson said payroll systems were just one of the things the taskforce had to consider.

The taskforce was also accused of favouritism because one of its members is employed by MYOB, a firm that provides payroll systems to businesses.

One email last month to officials called the review "unfair because we know one of the members of the taskforce is an MYOB employee which implies favouritism and negligent because the taskforce have wilfully ignored all offers of support from providers to ensure the best possible outcome".

MYOB has been on the taskforce from the beginning, as one of Business New Zealand's nominated independent representatives. "MYOB itself is not currently providing any services, such as the detailed payroll testing, to the taskforce," a MYOB spokesperson said.

Five of the biggest payroll providers - Datacom, AMS, Xero, SAP and iPayroll - were on a payroll systems functionality group set up earlier by the ministry. RNZ has approached each of the five providers for comment.

The emails indicate at least one of the five expected this involvement would have assured them a voice at the taskforce. One said in a 2 August email: "We are disappointed in the approach taken by the taskforce to date on this matter. It has the appearance of simply 'ticking the box' without genuinely consulting more widely."

"All workers and employers deserve a real solution that will work in practice. Unfortunately there is a distinct level of scepticism that this is probable," another email on 1 August said.

The payroll systems testing is being done by chartered accountants and professional services firm Hudson Taylor, which is not a specialist payroll provider.

"The taskforce engaged independent technical experts through a competitive tendering process. Our experts have been thoroughly testing proposals with real-world payroll data to ensure this criteria will be met, " Prof Anderson said.

"The taskforce will only recommend options where our analysis, our independent advice, and feedback from payroll providers or others gives us confidence the option is consistent with all nine of the review's criteria."

Business New Zealand chief executive Kirk Hope said payroll companies had not written to the taskforce raising concerns.