Controlling Third-Party Employees: What Companies in New Zealand Hiring Overseas Talent Need to Know

Hiring overseas talent in New Zealand? Avoid legal implications by understanding how to control third-party employees.
Written by Simar Singh
Last Updated On June 18, 2023
Contributors: Denise Renshaw. Edited By Inder Singh & Reviewed by Yongtian Liu.

As New Zealand continues to attract talent from all over the world, more and more companies are hiring overseas employees to join their teams. While this can bring many benefits, it can also create some unique challenges, especially when it comes to controlling third-party employees. In this blog post, we will discuss what companies in New Zealand hiring overseas talent need to know about controlling third-party employees, including the legal implications and how to ensure compliance with employment laws.

What is Controlling Third-Party Employees?

Controlling third-party employees refers to a situation where a company hires employees from another employer, directs or controls those employees as if they were the direct employer, and is not the direct employer in the employment agreement. This means that the company has a certain level of control over the employees' work, including their schedule, tasks, and performance, despite not being their direct employer.

Legal Implications of Controlling Third-Party Employees

Controlling third-party employees can have legal implications for both the company and the employees involved. If a company is found to be controlling third-party employees, it may be considered a "de facto" employer, meaning that it is effectively acting as the employees' employer, even if it is not explicitly stated in the employment agreement. This can result in the company being held liable for any breaches of employment law, including minimum wage, holiday pay, and other entitlements.

Furthermore, if the company is found to be controlling third-party employees, it may also be subject to the obligations and responsibilities of an employer, including providing a safe and healthy workplace, managing employee performance and conduct, and complying with relevant employment laws.

How to Ensure Compliance With Employment Laws

To ensure compliance with employment laws when hiring overseas talent, companies in New Zealand should take the following steps:

  1. Review the Employment Agreement: Companies should review the employment agreement with the third-party employer to ensure that it is clear who the direct employer is and what the terms and conditions of employment are.
  2. Avoid Excessive Control: Companies should avoid exercising excessive control over third-party employees, including their schedules, tasks, and performance. Instead, they should focus on providing guidance and support to ensure that the work is completed to a satisfactory standard.
  3. Communicate Effectively: Companies should ensure that there is effective communication between the third-party employees and the direct employer to avoid any misunderstandings or confusion about their roles and responsibilities.
  4. Seek Legal Advice: Companies should seek legal advice from an experienced employment lawyer to ensure that they are complying with all relevant employment laws and regulations.

Conclusion

Hiring overseas talent can bring many benefits to companies in New Zealand, but it is important to be aware of the legal implications of controlling third-party employees. By taking the steps outlined above, companies can ensure that they are complying with employment laws and regulations, while also providing a positive and productive working environment for all employees.