Novopay News, 18 November, 2016
Welcome to the latest edition of Novopay News. The recent 7.8 earthquake and aftershocks have been distressing and highly disruptive for many of us around the country.
I would like to thank all payroll staff in schools, along with Education Payroll staff, who have shown such patience and resilience. Our Christchurch office is up and running but our offices in Featherston Street, Wellington have been damaged. Therefore for the next few weeks we are working out of temporary accommodation. Our lead story provides more detail on the effect of the earthquakes on EPL and our response.
In this issue there is important information about the tax change to lump sum payments. This impacts all New Zealanders who receive lump sum payments throughout the year. It will particularly affect some school employees in pay periods 18 and 19. We ask that you be very proactive in your communications about this to school employees.
Wishing everyone the very best during this challenging time.
Mathew Gordon, Manager, School Account Teams Education Payroll Ltd
Education Payroll and the Big Shake
"I was in bed and I woke up and it was a bit like being in a boat in the high seas - everything was rocking and rolling about," says Vivienne O'Reilly, capability adviser.
Vivienne and her husband jumped out of bed and sheltered under a doorframe. News travels fast an hour after the midnight earthquake struck Vivienne received a text from her daughter in Hong Kong asking if she was alright.
She lives in Greytown and couldn't get to work on the Monday because the railway lines were being checked for damage. "We were told not to come into town on Tuesday because of the flooding. I couldn't get back to work until Wednesday."
In Te Horo payroll adviser, Deidre MacInnes, woke up with a premonition of the earthquake before her house started shaking. "I kept poking my husband with a finger and he wouldn't wake up. Eventually he did and said 'Why are you poking me??' and I said 'quake!' I checked the house and nothing had moved except the dog which rushed inside and hid behind me."
It took to Thursday for her to return to work as the railway lines from the Kapiti Coast were closed and then Tuesday's 24 hours of rain caused a slip on main access roads. "On Wednesday it would have taken two half hours to go one way and two half hours the other way so it wasn't worth it."
Chief Operating Officer, Duncan Boennic, and his family live 500 metres from the sea in Seatoun. Monday midnight, minutes after the quake, his wife, three kids and two visiting in-laws were bundled into the car with blankets and headed off up the hill into Seatoun Heights to get away from any tsunami. They waited till 4.30am until it was safe.
Education Payroll's senior management teams texted each other at 5.30am Monday morning and had their first conference call at 7am. This led to a series of emergency business contunity meetings every three hours for the next four days. The Ministry of Education was represented at these meetings. Staff were asked to stay home and the sector was briefed with regular Alerts. Managers were given areas to review such as property, IT and the like. The objective, Duncan says, was to evaluate the situation and see if Education Payroll was able to support the payroll delivery.
Much of Monday was taken up with the state of the buildings in Featherston Street and Hazeldean in Christchurch. The Christchurch building came through the quake relatively unscathed and after an engineer's clearance staff were back by noon Wednesday. The Wellington building was in a worse state. The water tanks in the building had been ruptured by the quake and the toilets were not working and it cannot be occupied for several weeks. Fortunately the Ministry of Education stepped in and provided temporary space on the first floor of its building in Bowen St.
"Once we had a space we could go about the process of getting desks, setting up IT and communications", says Duncan. Staff have been steadily drip fed into the new office space; 25 staff on Wednesday, 78 staff on Thursday and 100 on Friday.Staff worked on extended shifts on the Wednesday to get clean SUE reports off that night. On Thursday morning a limited telephone service was up and running. He expects everything to be back to normal on Monday 21 November."We have also been working with the 11 schools directly affected by the quake in the Hurunui and Kaikoura districts," says Duncan. "It has been pretty tough for everyone but just great to see how everyone goes the extra mile in a crisis such as this."
27 January Termination Dates Showing as 29 January
If you entered 27 January as a termination date for an employee and it is now showing January 29 on your reports, and in NOL, we are aware of this. We are going to move these dates back to 27 January in pay period 22. No action is required by schools.
Tax Changes to Lump Sum Payments Will Affect Some School Employees
It is important that employees in your school are aware of tax changes that could impact them in pay period 18 and 19. Inland Revenue has changed its operational position on holiday pay to clarify the treatment of tax on holiday pay, annual leave on termination and accrued annual leave paid in advance. This is not specific to education - the changes are how Inland Revenue will treat all relevant lump sum payments for all New Zealanders across the year.
Since 1 April 2016, these types of payments have been taxed as "extra pay" and therefore at a lump sum rate. If a school employee receives a leave in advance payment or termination payment at the end of the school year, the net payment is likely to be different to what they may have expected to receive. This payment will be different for each individual.
The employees who are likely to be impacted are:
- . Term time only non-teachers
- . Fixed term teachers who have not worked for a full year
- . Employees that are retiring or terminating their employment in a school.
A number of sectors process a large number of these types of payments at particular times of the year. For the education sector this is the period leading up to Christmas. Please ensure that all of your school employees are aware of this change as schools are likely to be closed for the holidays when pay is received in pay period 19. We appreciate your support for ensuring that all school employees know about these important tax changes.
2017 version of the NOVO23nt annualisation form is now available
For staff who want to annualise their pay, and are entitled to under the "Support Staff in Schools' Collective Agreement", please use this form to instruct your Novopay School Account Team to set up annualisation. Send annualisation instructions to your Novopay School Account Team as early as possible, ideally before Christmas, but at the latest prior to the forms cut-off for Pay Period 23, 5pm on 6 February 2017.
Important: If an annualised employee is an authorised user you must send their NOVO23nt form to the Novopay Service Team before their start date in 2017, or they will not be able to access Novopay Online in 2017.
Annualisation is paid from the beginning of pay period 23 of one year to the end of pay period 22 the following year as per the Support Staff in Schools' Collective Agreement. You can find more information regarding Annualisation on the Novopay website, or download the Annualisation Flyer which can be found on the Annualisation page here.
EoY screens will be closing soon
The End of Year (EoY) screens are closing shortly. You have until 5pm, 28 November to complete the end of year processing. Completing the EoY process ensures that employees get paid their correct holiday pay at the end of the year in pay periods 19 and 20.
There are a number of tools to support you. Use these quick links to useful resources:
Do not terminate an employee unless you are certain that they are not returning to their current job in 2017, as per the EoY instructions. Terminating employees in the End of Year screen will remove them from your payroll. If you have used the EoY screen to process your termination DO NOT also send a Novo6 form unless their last day of duty has changed from the date you entered online.
If you are uncertain about whether the termination has been submitted you can re-run your End of Year report and check that the change has been recorded.
There are some terminations you cannot process in the EoY screens and you will need to submit a Novo6 form. These are:
- . Retirement
- . Medical Retirement
- . Redundancy
- . Fixed Term teachers transferring to another school
Reminder: Leave Bookings for 52-Week employees
Please check leave details for 52 week non-teachers. If required, book annual leave for these employees in Novopay Online for present and future pay periods, or through a Novo 12 form for retrospective leave dates. This helps to maintain good leave records for these employees. You can check leave details on your school's fortnightly leave report.
Start of Year
Once you have completed your End of Year tasks, we recommend that you start preparations for Start of Year:
Print and read the Novopay Start of Year 2017 instructions.
Record on your report, ready for keying into NOL when SoY screens open on 14 December:
Employees must be restarted no later than the pay period in which they return to work. You will also need to know if any staff have a change in:
- . Funding / Department code
- . Employment status
- . Hours worked
- . Allowances
- . LWOP
The Start of Year (SoY) training is available now so we suggest you complete the SoY self-paced learning module or book a space on one of the Start of Year e-Workshops on the Training Services website.
Why are the SOY screens opening on 14 December and not earlier?
We have to do all the processing for PP19 before we can open the Start of Year screen. We need to finish holiday pay processes before we can open the screen so that you will have all the information you need to make your changes and additions for staff returning to work in the New Year.