Changes will affect all customers who are Experience Rated & Self-employed. From the 2020 Levy Year and onwards, ACC will be levying self-employed people after the levy year has finished, based on their actual earnings.
Changes to Self-employed levies:
This means you’ll receive your 2020 Cover Plus invoice starting around July/August 2020 instead of July/August 2019 like you might be used to. It won’t be based on your previous year’s earnings, instead it will be based on your actual earnings, filed with IR, for the year ending 31 March 2020.
You will need to let ACC know if you have ceased trading.
Changes to Experience Rating:
The new changes will allow businesses to have more control of the levy it pays.
The key changes include:
-reducing the influence of older claims on the Experience Rating adjustment
-removing the ‘Industry Modifier’, so the Work levy more closely reflects a business’, or business group’s, claims and return to work performance
-making it easier for more businesses to access larger discounts
-applying discounts or loadings in increments.
The changes will come into effect with government approval of the new Experience Rating regulations in early 2020. But ACC are letting businesses know now because the changes will affect the calculation of the 2020/21 levy. Any health and safety improvements made now could start affecting the levy from 2021/22 and beyond.
As a director of a New Zealand company, you’re personally liable for potential compensation, fines and legal costs. Every director has duties and obligations under the Companies Act 1993, and despite this, very few clients have considered Directors and Officers (D&O) Liability Insurance for
their smaller businesses. There are some significant personal risks in occupying leadership positions in business. Company directors and senior executives can be held accountable for the actions, or acts of omission, of the business. Company directors and officers can be held personally liable not just for their own mistakes, but also for the failings of people they relied on.
It is also worth noting that the litigation landscape in NZ is changing and we are seeing the arrival of litigation funders who are so prevalent in Australia. Litigation funders band together a group of creditors and fund their legal costs to bring a class action against either the directors and/or the company. If the plaintiffs are successful, the funders take a percentage of the award as their fee.
D&O insurance is designed to protect directors, officers and employees involved in the management of a company, from personal loss resulting from legal claims made against them while they perform duties on behalf of the company.
The difference between public liability insurance and D&O Covers
Public Liability insurance protects business owners against the financial implications if found liable for loss or damage to other people’s property, or cause illness or injury that is not covered by the Accident Compensation Commission (ACC).
D&O Liability Insurance provides company directors and officers with cover for costs involved with legal action arising from carrying out your management and fiduciary duties. Directors and officers are accountable for their actions and can be exposed to serious liability risks. They can be personally liable for their legal obligations and any resulting lawsuits can be time consuming and costly to defend.
Who needs D&O Liability Insurance?
Directors and officers liability insurance has become essential for all business leaders. Far too few directors fully understand how accountable they are for their actions, or what the implications can be for failing to conduct business in line with their duties.
A company’s board of directors and officers are personally at risk. They are accountable for all aspects of corporate governance, including business failings, oversights or omissions. Family trusts and the company’s limited liability status may not be enough to keep a director’s home and other personal assets safe.
The much publicised Health and Safety obligations, for example, provide exposure. Directors and officers are obligated to ensure a good safety culture and to ensure that risks are identified, documented and mitigated. If there were a serious accident in the workplace and non-compliance was found, directors could be held liable.
From 1st of March 2020, Inland Revenue will no longer accept payment by cheque, or cheques dated after 1 March 2020.
Thankfully, there are other payment options you will need to consider, these options include:
1. Open communication lines early
Whether you have five or 50 staff, communication is key when it comes to performance reviews. Let your staff know early (ideally during induction) what goals and objectives they need to meet and give them a chance to voice their ideas. By reviewing and updating these at each review, it will be easier to explain why they’ve received a less-than-perfect appraisal if their performance wanes.
2. Address challenges ASAP
If an employee is under-performing, there are a range of things you can do to help. Just make sure you do it sooner rather than later. Try observing them and gently offering constructive advice to help them do their job better. You could offer extra training to improve their skills if necessary. Consider any challenges they’re facing outside of work – flexible working conditions may be a positive solution for both of you.
3. Preparation is key
Give your employee at least a couple of weeks’ notice so you both have time to prepare for the appraisal. Look at your employee’s job description, notes from previous reviews and performance indicators in advance. Send your staff member a list of questions to review ahead of time, in relation to areas such as job satisfaction, responsibilities, and work/life balance. If your employee is a star-player, get feedback from other employees or key customers to support that view.
4. Keep it formal but friendly
A performance appraisal isn’t Dragons’ Den or a casual chat over coffee, it’s somewhere in between. It’s a chance for both of you to honestly discuss the role, whether goals have been met, what’s good or bad about the job, and if their pay will increase and why or why not.
5. Write everything down
Take notes at each review and share a written summary with your employee afterwards to ensure you agree it’s a true reflection of what was discussed. This is key if a staff member isn’t performing because if you have to let them go, you’ll have proof of warnings and the steps you took to try to help them improve their work.
6. Book in regular catch ups
Keep employees engaged and avoid potential issues by setting up informal chats once or twice a month. You don’t have to wait for the full performance review to give staff feedback or get feedback from them.
Remote working offers operating cost reductions, as well as greater flexibility for staff, but it can pose risks. These risks largely relate to a remote workers physical safety & the safety of business systems and confidential information.
Successful remote working also depends on employees with skills & personality traits that enable them to work productively and safely.
With firms dealing with sensitive details such as tax, finances & intellectual property, there is a clear obligation to maintain confidentiality, whether the workers are in the office, a virtual office or sitting at an airport or café.
“Clients don’t care how their information was breached, it’s the fact that it was breached at all that is the problem. Training staff, or having processes or policies in place, would be part of any reasonable steps to protect that information.
Playing it safe – some tips for businesses as they implement remote working
Update Policies – too often companies implement a remote working policy but then fail to monitor or update it. You need to regularly assess & revise the policy
Enforce policies – No one wants to work for Big Brother, but it is important for employees to know and follow remote working security policies. Staff will need sufficient training around best practice to follow.
Identify Threats – Cyber threats change continuously, so alert employees to any potential new threats. Video chats are a great way to keep them informed.
Protect Networks – Not all employees require access to all aspects of a business’s private network. Identify who needs access to what information to minimize the risk of fraud or accidental data errors.
How to protect yourself & your business
Dialing into a conference from an airport lounge or working from a hotel while using an insecure email platform? Sound familiar? It’s so easy to do but could result in a client’s information being overheard or intercepted and used by a third person, giving rise to possible legal action. You want to be able to show that you’ve taken steps to educate people and that you have policies in place. Nobody can guarantee that their business won’t be hacked or suffer a security breach, but if you have to defend a legal action or your business reputation, the question will be whether you took appropriate steps to prevent a data breach occurring.
Whatever managers do, they should not ignore workplace health & safety issues. Of growing relevance are mental health issues in traditional & remote workforces. With employees increasingly needing to be available around the clock via phones, texts & emails, the boundaries between work & home have never been more obscure, and can take a mental toll. The culture of “busyness” is tied up with some really great benefits of working flexibly but it comes with some negatives as well. Simple actions can help to combat the sense of isolation. Businesses can encourage regular video catch ups with staff, so they still feel connected to the office.
Johnston Associates has decided to provide more regular information via social media channels – namely Facebook and LinkedIn. We will continue to publish our quarterly newsletter, but you will find more regular and timely information through these channels.
So choose your preferred outlet by clicking on one of the buttons below, and don’t forget to follow us!
Disclaimer – While all care has been taken, Johnston Associates Chartered Accountants Ltd and its staff accept no liability for the content of this newsletter; always see your professional advisor before taking any action that you are unsure about.