Step 5: Hiring
How do I hire a new employee?
The hiring process has a few steps involved to ensure that you are hiring the right person. More information on many of the steps below can be found in Your Obligation as an Employer (e.g. trials and probationary periods, employment agreements and pay).
How do I complete tests and checks?
As an employer, you can use tests and checks before and during employment. This can include a:
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criminal history check,
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drug and alcohol test (if relevant to the job), and
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visa check.
See the Employment NZ website here on how to legally conduct these tests.
It is also important during this time that you get two to three referees from the candidate. A referee is someone trustworthy who can vouch for the skills and experience of a candidate. You should call these referees to check that the person you plan to hire has the experience and qualifications they say they do. For school leavers who have limited job history, doing a reference check with a teacher can be a good substitute.
You can also check if there has been any employment issues with this person in the past. See more advice on how to do reference checking from Seek here.
What are employment trials and probationary periods?
To assess a new employee's performance, a 90-day trial or probationary period can be used. During this time, you can evaluate the employee's ability to do the role and decide if they meet performance expectations. If they do not, you can ask them to leave. By including a 90-day employment trial or probationary period in the employment agreement, you can make sure that the employee is a good fit for your team and business. See Employment NZ website here for more information.
How do I negotaite the employment agreement and pay?
Once you are satisfied with the tests and checks you have completed for your candidate, it is time to formalise the employment relationship by signing an employment agreement. More information can be found in Starting Employment.
This is also a great time to think about whether you want to provide anything above the minimum entitlements, such as extra leave or higher pay. These benefits can also be considered during the initial step of the hiring process (preparing) as they can be used as selling points to attract exceptional candidates.
By formalising the employment relationship with a well-drafted agreement and considering additional benefits, you can set a positive tone for your new hire and ensure clarity from the start.
What employment paperwork needs to be completed?
Legally, there is mandatory paperwork that must be completed when you hire a new employee. This includes:
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Signed employment agreement
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Details and proof of a visa, residency or citizenship
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IR330 tax declaration
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Kiwisaver forms
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Setting up records of wages, time, leave and holidays
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Emergency contact details
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Bank account number for wages (if agreed as the payment method).
If this is your first employee, you must register as an employer with Inland Revenue who will advise ACC. See an Inland Revenue pdf guide here for information on how to set up employees, especially as a first time employer, on the Inland Revenue website.
It is important to note that if a person works for you under a verbal agreement and no employment agreement is signed, employees are still entitled to the minimum employment rights the law provides. See more information in Your Obligations as an Employer.