Pay Equity Settlement Implementation
Aged Residential Care Provider
Newsletter
26 May 2017
This newsletter is designed to assist Aged Residential Care (ARC) providers in implementing the Care and
Support Workers (Pay Equity) Settlement. We are sending these newsletters out every week to reiterate key
messages; provide updates on ongoing processes; and provide information on upcoming events.
This edition outlines recent implementation activities and developments including:













Key messages
Key dates
What’s happening this coming week
Legislation
Residents’ increase
Qualifications update
Ratification
Information sessions
Data collection reminder
Some ARC providers need to complete two data collection tools
Data collection privacy principles
Frequently asked questions
Contact the pay equity implementation team
Key messages
On 18 April 2017, the Government announced a $2 billion pay equity settlement for 55,000 care and
support workers in New Zealand’s aged and disability residential care and home and community support
services.
From July 1, workers will receive a pay rise between 15 and 50 per cent depending on their qualifications
and or experience. The settlement means over the next five years, the workforce will see their wages
increase on a range between $19 and $27 per hour.
The Care and Support Workers (Pay Equity) Settlement Bill was introduced to Parliament on 25 May.
This means providers have a legal obligation from 1 July to ensure employees receive their increased wages
in the first pay day from their employer (i.e. weekly or fortnightly, depending on their normal pay run).
A copy of the Settlement Agreement can be found on the Ministry’s website:
http://www.health.govt.nz/system/files/documents/pages/care-support-workers-pay-equity-settlementagreement-signed-8may17.pdf.
Pay Equity Settlement Implementation
1
Implementation approach
The Operational Policy Document, which provides detailed guidance on the implementation of the
Settlement Agreement, is available on the Ministry’s website.
In order for providers to commence payment to qualifying employees from 1 July 2017, a process to pass
additional funding to providers is required. In the Aged Residential Care sector, for most services this will
be done by an increase to the prices paid for those services.
For the national ARC contract, there will be an increase to the price paid for the ARC nationally contracted
services (rest home, hospital, dementia and psycho geriatric). This will be delivered through the usual
annual national ARC contract process and DHBs will communicate the process and timeframes for this
through the usual communication channels. Providers should refer any questions on this process to their
industry association body or DHB Central TAS.
For other services paid at a bed day rate (e.g. facility-based respite care), the pay equity settlement payment
will also be made by increasing the prices paid for those services.
Key dates
 By 31 May: Claim forms for employee attendance at union ratification meetings are to be submitted to
the Ministry, please download the form here: http://www.health.govt.nz/new-zealand-healthsystem/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers.
Ratification claims received by 31 May will be paid on 20 June 2017. For ratification claims received
after 31 May the Ministry will aim to process them within 10 business days but no earlier than 23 June
2017.
 By 2 June 2017: ARC providers must submit completed Workforce Translation Tools.
 By 1 July 2017: Legislation will be progressed through Parliament to give effect to the Settlement
Agreement and ensure the new wage rates are passed onto workers from 1 July.
 From 1 July 2017: Providers have a legal obligation to ensure employees receive their increased wages
in the first pay day from their employer (i.e. weekly or fortnightly, depending on their normal pay run).
 From 1 July 2017: Providers will advise funders that they have commenced making payments to
employees. Unions will also play a role in ensuring that employees have received the new wages.
What’s happening this coming week
The focus for ARC providers over the coming week should be on collecting and submitting data, gathering
staff qualification information, preparing claim forms for employee attendance at union ratification
meetings, contacting pay roll providers and reviewing the Ministry’s frequently asked questions on the
Settlement.
Legislation
The bill to give effect to the Care and Support Worker (Pay Equity) Settlement Agreement passed its first
reading in Parliament on 25 May with unanimous support.
The bill enshrines the new pay rates in law and ensures providers pass on the $2 billion of wage increases
over five years to the 55,000 workers in aged and disability residential care, and home and community
support services around the country.
Pay Equity Settlement Implementation
2
The introduction and first reading of this bill is a significant milestone in the implementation of the
settlement, following Cabinet approval in April and signing of the agreement in early May.
The bill has been sent to the Health Select Committee and is due to be reported back to Parliament by 6
June 2017. Submissions requests will be sent directly to groups and individuals.
The bill must be fast-tracked through Parliament to ensure it is passed by 1 July.
More information on the settlement is available at on the Ministry of Health website at:
www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement
Residents’ increase
The Settlement, which increases the wages paid to aged care workers, will result in a higher annual cost for
aged residential care from 1 July 2017.
When we announced the settlement in April we signalled that the 11,070 residents who pay the maximum
contribution towards the cost of their care will face increases on 1 July.
The precise amount is being determined as part of annual national aged care contract negotiations between
representatives of DHBs and providers. This will be gazetted at the end of June and communicated with
providers, aged care residents and their families, and interested parties shortly. We expect the total
increase will be between 9 and 10 per cent which includes the separate annual increase for standard cost
pressures.
We recognise the price increase will be sharp, however it reflects the true cost of providing this care.
The pay equity settlement will also have additional benefits for the quality of care for residents in aged care
facilities with reduced staff turnover and caregivers with more skills and qualifications.
A higher aged residential care cost as a result of the Settlement does not represent a barrier to accessing
care. The impact for these residents of paying a higher cost for their care is that their assets will reduce to
the threshold level faster, at which point the Government funds the full Settlement costs.
The Ministry, DHBs, providers, and consumer representatives are also undertaking a funding model review
for aged residential care over the next year. One of the things the review will look at is how to provide
incentives to keep future cost increases to a minimum.
Qualifications update
The industry training organisation, Careerforce, is reviewing qualifications recognised by the New Zealand
Qualifications Authority for relevance to the work undertaken by care and support workers and equivalent
Level on the NZQF. As qualifications are assessed relevant and equivalent they will be posted on the
Careerforce website: https://www.careerforce.org.nz/pay-equity/equivalencies
The qualifications under review include those forwarded by employers.
If a qualification is not on the Careerforce list, translation will be based on length of service with the current
employer.
If, following assessment by Careerforce a qualification is added to the list, eligible workers may move to a
higher band on the payscale and be entitled to back pay to 1 July 2017.
Registered nurses
If New Zealand trained enrolled or previously registered nurses are working as care and support workers,
they should be translated to Level 4 on the new pay scale.
The Ministry is working with Careerforce to determine how best to assess the relevance of other
qualifications higher than Level 4 on the New Zealand Qualifications Framework, for the purpose of
transition of existing care and support workers to the new pay scale from 1 July 2017.
Pay Equity Settlement Implementation
3
Ratification
The ability of all care and support workers (union members and non-union members) to have the
opportunity to vote in the ratification process for the Care and Support Workers (Pay Equity) Settlement
Agreement is fundamental to the settlement. The Ministry of Health is supporting the implementation of
the ratification process and in good faith encourages all employers to comply with this process.
Although the Care and Support Workers (Pay Equity) Settlement Bill has now passed its first reading in
Parliament, the ability of all care and support workers to vote in the ratification process remains important.
The Government will reimburse employers for wages at the rate of $25 per care and support worker
verified by the union and the employer as having attended a ratification meeting. Claim forms must be
submitted to the Ministry, please download the form here: http://www.health.govt.nz/new-zealand-healthsystem/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers.
Ratification claims received by 31 May will be paid on 20 June 2017. For ratification claims received after
31 May the Ministry will aim to process them within 10 business days but no earlier than 23 June 2017.
Information sessions
This week, the pay equity implementation team held information sessions around the country in Auckland,
Hamilton, Wellington, Christchurch, Dunedin and via teleconference.
Thank you to those who attended. The slides from these information sessions will be made available on the
Ministry’s website soon.
Data collection reminder
The Workforce Translation Tool should be completed by all ARC providers by 2 June. It can be downloaded
from: http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equitysettlement/pay-equity-settlement-information-providers/pay-equity-settlement-aged-residential-care
The Workforce Translation Tool is being used because:
 The tool helps providers to work through eligibility and translation in order to make changes in their
payroll systems
 The Ministry needs to provide assurance to Ministers that providers will be in a position to accurately
pay eligible employers the correct rates from 1 July.
 The Ministry needs to provide government with information about the outcomes and benefits of its
investment to settle historic pay equity claims for care and support workers: this means the Ministry
must be able to conduct workforce analysis to provide an accurate picture of the care and support
workforce, and monitor changes over the course of the settlement period. This includes changes to the
workforce’s size, makeup, stability and qualifications.
The data collection and submission process
The data collection and submission process for providers consists of the following steps:
1. Download the Workforce Translation Tool from the following Ministry of Health webpage:
http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equitysettlement/pay-equity-settlement-information-providers/pay-equity-settlement-aged-residential-care
2. Review the Workforce Translation Tool in correspondence with the guidance document in Section 7.
Please contact the Ministry on [email protected] as soon as possible regarding
any questions or clarifications.
3. Complete the tool using payroll reports for the eligible workforce as at 1 May 2017.
4. Upload the tool to this website: http://tinyurl.com/MoH-NZ-PE1
Pay Equity Settlement Implementation
4
The Workforce Translation Tool must be uploaded by Friday 2nd June. Providers will need to enter their
contact information when they upload their completed submission.
The central implementation team may contact you should there be any need to clarify your data
submission.
Support is available
A central Ministry team will be actively working with providers to help them with completing the
Workforce Translation Tool. Where providers are unsure they will meet the 2 June deadline they need to
flag this as soon as possible with the team at [email protected] or on 0800 855 066
so they can proactively work with providers.
As questions are answered these will be updated in the Q&A section of this document and/or via the
Ministry website http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-payequity-settlement
Some ARC providers need to complete two data
collection tools
Some ARC providers need to complete two data collection tools. This is for providers that may also provide
services eligible for funding related to the Care and Support Workers (Pay Equity) Settlement that are not
part of the ARC national contract, or another service paid at a bed day rate, such as facility-based respite.
These additional services may be Home and Community Support Services, or Community and Residential
Living (Day Programmes). We have contacted these providers directly.
Data collection privacy principles
Before requesting any information, the Ministry assessed the proposed data collection information fields
against all twelve information privacy principles in the Privacy Act. In doing so, the Ministry identified key
risks and developed appropriate risk responses. This information is included in the short-form Privacy
Impact Assessment (PIA), which is published on the Ministry website: http://www.health.govt.nz/newzealand-health-system/care-and-support-workers-pay-equity-settlement/pay-equity-settlementinformation-providers
Frequently asked questions
1. What should a provider do if the calculated pay rate from 1 July 17 is lower than the
current pay rate at 1 May 17?
The rate shown under the column titled '18. Pay rate at 1 July 17' in the Workforce Translation Tool
represents the translated rate for an employee based on either years of service or qualifications
(whichever, yields the higher rate). This rate only becomes the employees new rate from 1 July 17
provided it is greater than the employee's current rate as shown under the column titled '16. Current
Pay Rate at 1 May 17'. In situations where the 'Pay rate from 1 July 17' is lower than the 'Current Pay
Rate at 1 May 17', the employee's pay rate should not be altered as of the 1 July 17.
Pay Equity Settlement Implementation
5
2. What services is the Data Collection Tool required for?
Home and Community Support Services and/or Community and Residential Living Services.
3. What services is the Workforce Translation Tool required for?
Please include all employees working on a contract eligible under the Settlement - whether an ARC
national contract service or a Home and Community Support Service.
4. What about an employee’s other conditions of employment?
Generally, all other conditions of employment remain the same. However, service and qualification
allowances will be extinguished because they have been replaced by the new qualifications-based
pay structure. Weekend and night penal rates in employment agreements will remain but those that
are calculated as a percentage of base pay will be converted to allowances.
5. How do I know if certain workers and/or certain services are eligible?
A multi-step decision process needs to be used to assess eligibility of any particular worker:
 Determine whether the service is covered by the Settlement Agreement; and
 Test whether the worker is within scope of the Settlement Agreement.
 Establish whether the service is funded by public funding not private.
We recommend you look at the eligibility information in the Settlement Agreement that can be
downloaded from this webpage http://www.health.govt.nz/new-zealand-health-system/care-andsupport-workers-pay-equity-settlement and section 3 of the Care and Support Workers (Pay
Equity) Settlement operational policy document that can be downloaded from this webpage
http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equitysettlement/pay-equity-settlement-information-providers.
6. What types of work does the settlement not cover?
Settlement parties agreed that the settlement does not include behavioural support services,
caregiver support, child development services, environmental support, funded family care, mental
health services, and services arranged privately by clients. Meanwhile, the Ministry of Social
Development and Ministry for Vulnerable Children Oranga Tamariki have agreed in principle to
enter into negotiations with unions and providers on the basis that vocational and disability
workers they fund will be covered by terms consistent with the Settlement Agreement.
7. What if some of my employees hold qualifications other than the NZQA levels 2, 3 or 4
New Zealand Certificate in Health and Wellbeing?
Please see this factsheet for more information: http://www.health.govt.nz/new-zealand-healthsystem/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-informationproviders
8. Are diversional therapists and/or activity co-ordinators eligible?
Diversional therapists and/or activity co-ordinators are eligible under the Care and Support
Workers (Pay Equity) Settlement.
We understand that different organisations use different terminology, including activity coordinators, activity officers, diversional therapists, and possibly other titles.
These workers are eligible, providing they also meet the following multi step process below:
1. First, is to determine whether the service is covered by the Settlement Agreement; and
2. Second, is to test whether the worker is within scope of the Settlement Agreement.
3. Third, the service is funded by public monies not private.
We recommend you look at the eligibility information in section 3 of the draft Care and Support
Workers (Pay Equity) Settlement operational policy document and the Settlement Agreement. The
Settlement Agreement is available for download at this webpage: http://www.health.govt.nz/newzealand-health-system/care-and-support-workers-pay-equity-settlement
Pay Equity Settlement Implementation
6
9. Some of my employees perform services that are in scope some of the time, and
services that are out scope some of the time. How do I determine their accurate pay
rate?
Some employees can be receiving more than one pay rate. Employers must pay the in scope services
at the appropriate pay band when work is performed on these services. Out of scope services pay
rates are a business decision for the provider. If these are at a separate rate, then this should be
reflected with dual rates in a pay roll system.
10. What pay band should an existing staff member with 12 years or more current
continuous service but no qualifications be moved to after 1 July?
All existing care and support workers who reach 12 years current continuous service with their
employer after 1 July 2017 and who have not achieved a Level 4 Certificate will move on to the
following rates unless there are genuine reasons based on reasonable grounds that the employee’s
employer did not provide the support necessary for the employee to achieve the Level 4
qualification, in which case the employee will be entitled to move to the Level 4 step above. Any
dispute about the provision of the necessary support will be dealt with through the normal dispute
resolution processes.
After 1 July
2017
On or after 1
July 2018
On or after 1
July 2019
$22.50
$23.50
$24.50
On or after 1
July 2021
$26.00
11. How is continuous service defined?
Current continuous service is considered to be service with the employee’s current employer which
includes any service transferred under the Employment Relations Act 2000 (the Act).
In summary, the Act sets out the process for an employer to use where a business is sold,
transferred or contracted out and requires employment agreements to contain ‘employee protection
provisions’. Specific groups of employees, in certain situations, may transfer to the new employer
on their existing terms and conditions, including having any transferred service recognised as
continuous service.
12. Are the costs to employers from the settlement fully funded?
Employers will receive additional funding towards offsetting the additional costs imposed by the
legislation*. Employers will also receive the benefits of lower turnover due to increased wages and a
more capable and skilled workforce through access to training and qualifications.
Frequently asked questions can be found in employer factsheet which is on the Ministry website
http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement.
Contact the pay equity implementation team
There is a dedicated pay equity implementation email address, [email protected],
which you can send questions to at any time. Someone from our team will respond to you as soon as
possible.
For more information visit health.govt.nz.
26 May 2017
Pay Equity Settlement Implementation
7