Employers will not be able to offer workers different salary packages on the basis of their KiwiSaver membership following legislation introduced into Parliament last night by Labour Minister Trevor Mallard.
"Employees would be able to take a personal grievance against their employer in this situation," Mr Mallard said.
The legislation was introduced to ensure employers met their obligations to pay contributions to their employees' KiwiSaver accounts.
It aimed to address a situation where some employers were paying employees in KiwiSaver less than workers not in the superannuation scheme.
"In effect, the employees are taking a pay cut, which the employers are using to pay their KiwiSaver contribution."
That was despite the Government reimbursing employers with a $20 a week tax credit which covered their contribution to employees earning up to $104,000 a year in the first year (2008-09).
Employers had been able to get away with that in total remuneration packages when they insisted the packages included workers paying the employers' compulsory KiwiSaver contribution, Mr Mallard said.
Otago-Southland Employers Association chief executive Duncan Simpson challenged Mr Mallard to provide any examples where that had happened.
"This legislation will have to be unpicked one way or another after the election. It won't work regardless of who is in power."
It was disappointing Mr Mallard was ramming the changes through at such a late stage of Parliament's last session before the election, he said.
Many employers were now in the middle of wage and salary negotiations.
Someone would end up being disadvantaged in the process. Employees already in KiwiSaver would be disadvantaged by last night's changes, but further inequities would occur.
Mr Simpson gave the example of two workers in the same company, each earning $50,000, one of whom was in KiwiSaver and one who was not.
If both were offered a 4% wage rise, and that included a 1% employer contribution for KiwiSaver, the second employee could go back in a few months time, ask to join KiwiSaver and receive another 1%, he said.
Mr Mallard said the Government initially decided to leave the issue of contributions to normal good faith bargaining between employers, employees and unions.
However, some employers had taken advantage of the situation.
The law changes would be backdated to yesterday, but the amendments would not affect agreements entered into before yesterday.
