Q: We have HR wanting to offer an employee 2x employment contracts. 1 for a permanent position and 1 for a casual position.

We can have them set-up in our payroll system this way, with 2x employment details attached to the same employee, paid based on the different contracts.

But I wanted to check, is this ok to do? On the permanent contract they would be receiving annual leave entitlements, on the casual contract they would be receiving 8% PAYG. Would this also mean that on the casual contract they would need a secondary tax code? This doesn’t seem quite right though, as their employment is for the same company.

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A: NZPPA is currently writing an article on why it is not a good idea.  However, tax and employment regulations would enable this to be done.

Issues (just a few):

• Treated as two different employees
• Two different tax codes (could mean the employee ends up paying more tax for working for the same employer)
• Any deduction is applied to each position (SL, CS, KS, 157 notice court fines)
• Payroll will still need to meet all the requirements of the Holidays Act, how it is applied and managed
• They must be two separate and distinct positions, with no overlap
• What happens if there is a disciplinary action, as it may mean the employee is terminated from one position but can’t be from the other (as it is a separate position)
• There will be a lot more administration and management of these types of employees by payroll and HR.

Based on NZPPA audits, when we have come across this situation, we have found all instances to have compliance issues. NZPPA promotes keeping it simple in payroll; however, this is not a ‘keep it simple’ situation.