1. Understanding the Care and Support Worker (Pay Equity) Settlement Agreement
Information session
May 2017

2. Purpose of today’s information session
Section 1: Brief overview of the Settlement
Build a shared understanding of the key elements of the settlement agreement
Eligibility
Translation to new pay bands for the existing workforce
Section 2: Payment mechanism & data collection
Provide an overview of the steps required to implement the settlement agreement by 1 July 2017.

3. 1
Brief overview of the Settlement

4. There are three key parts to the Settlement Agreement
A. Eligibility
B. Translation
C. New rates from 1 July
There is a 3-part test to eligibility.
Translation of service and/or qualifications to new pay bands only applies to:
Workers that meet the 3-part test
AND
Are an existing care and support worker as at 30 June 2017
New rates for workers employed from 1 July 2017 when they meet the 3-part test

5. Assessing eligibility
A. Eligibility
B. Translation
C. New rates from 1 July
Assessing eligibility
A three-step decision process needs to be used to assess eligibility of any particular worker:
Step 1
Service
Step 2
Worker
Step 3
Funding
Determine whether the service is covered by the Settlement Agreement
Test whether the worker is within scope of the Settlement Agreement
Ensure the service is funded by public monies not private
Clarification on eligibility should be sought from

6. A. Eligibility
B. Translation
C. New rates from 1 July
Who is eligible?
The Settlement Agreement covers care and support workers employed by Providers funded by the Crown, DHBs or by ACC who work in the areas of:
Aged residential care
Community residential living
Home and community support services
Includes some ACC and Ministry of Health clients under 65 who require rest-home level care or high and complex needs for up to 24 hours a day
These services are generally known in the disability and support sector as day programmes, day services, residential services for disability support, facility-based respite, supported living and choices in community living
Following a needs based assessment including residents who are in independent living setting, in a retirement village.
Services known as Individualised Funding or Enhanced Individualised Funding
For the avoidance of doubt, the following are covered by the settlement:
home support workers employed by the following District Health Boards, who are not paid as healthcare assistants, are covered by this settlement: Waikato DHB, Wairarapa DHB, Hutt Valley DHB, Canterbury DHB and West Coast DHB;
disability support workers employed by Nelson Marlborough DHB, who are not paid as healthcare assistants; and
care and support workers providing the Services (defined in the Settlement Agreement) known as Individualised Funding or Enhanced Individualised Funding as employees are eligible.

7. A. Eligibility
B. Translation
C. New rates from 1 July
Who is not eligible?
health practitioner who is registered under and in accordance with the Health Practitioners Competence Assurance Act 2003
work hours that are not spent on care and support work
behavioural support services;
caregiver support;
child development services;
environmental support;
funded family care;
mental health services;
those provided directly by employees of DHBs, except as specified in the operational policy document
vocational and disability services funded by MSD; and
privately funded services

8. A. Eligibility
B. Translation
C. New rates from 1 July
Translation only applies to existing care and support workers as at 30 June 2017
Translation of service and/or qualifications to new pay bands only applies to:
Workers that meet the 3-part test
AND
Are an existing care and support worker as at 30 June 2017
Transition options
Current qualifications
Whichever is the most advantageous for the worker OR
Service with current employer

9. A. Eligibility
B. Translation
C. New rates from 1 July
Pay Band translation for existing care and support workers as at 30 June 2017
Length of Service
Qualification
Pay Band
1 July 2017
Year 1
1 July 2018
Year 2
1 July 2019
Year 3 & 4
1 July 2021
Year 5
<3 years’ service
Level 0 L0
$19.00
$19.80
$20.50
$21.50
3+ to 8 years’ service
Level 2* L2
$20.00
$21.00
$23.00
8+ to 12 years’ service
Level 3* L3
$22.50
$25.00
12+ years’ service
Level 4* 
L4b
$23.50
$24.50
$25.50
$27.00
Applying qualifications
The qualification must be a Level, 2, 3 or 4 New Zealand certificate in Health a Wellbeing from an NZQA accredited provider.
Employees have a responsibility to notify employers when they have gained a qualification. Employers should validate this using information (for example, cite the certificate from the employee).
In general, new pay rates should apply from the later of the date the employee notifies the employer, or the date on the qualification certificate, that is, when the qualification was achieved.
* “Qualifications” are those recognised by NZQA or equivalent

10. Assessing length of service for eligible existing employees
A. Eligibility
B. Translation
C. New rates from 1 July
Assessing length of service for eligible existing employees
Length of service is continuous service of an eligible service with his/her current employer. Continuous service includes service recognised as continuous under the provisions of Part 6A or Schedule 1B of the Employment Relations Act 2000.

11. A. Eligibility
B. Translation
C. New rates from 1 July
Progression for existing care and support workers after the initial 1 July 2017 translation
Existing care and support workers can progress to the next pay band step on achieving the length of service for that pay band as shown in the table below:
Length of Service
Pay Band
<3 years’ service L0
3+ to 8 years’ service L2
8+ to 12 years’ service L3
12+ years’ service
L4a
L4b
Level 4a exemption:
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 a “Level 4a” rate 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 claim the Level 4b step is payable

12. New care and support workers
A. Eligibility
B. Translation
C. New rates from 1 July
New care and support workers
All new eligible care and support workers from 1 July 2017 will progress through the pay bands only on the basis of obtaining qualifications.
Service-based progression does not apply for new workers from 1 July.
Qualification
Pay Band
1 July 2017
Year 1
1 July 2018
Year 2
1 July 2019
Year 3 & 4
1 July 2021
Year 5
Level 0* L0
$19.00
$19.80
$20.50
$21.50
Level 2* L2
$20.00
$21.00
$23.00
Level 3* L3
$22.50
$25.00
Level 4*
L4b
$23.50
$24.50
$25.50
$27.00
* “Qualifications” are those recognised by NZQA

13. Support for training and qualifications
A. Eligibility
B. Translation
C. New rates from 1 July
Support for training and qualifications
The unions and Government support care and support workers gaining formal qualifications and wish to create the right incentives for employers to allow this to happen.
Contracts between funders and providers will require employers to provide the necessary systems and support to enable workers covered by the settlement to reach the following NZQA Health and Wellbeing Certificate (or their relevant equivalent) qualifications within the following time periods:
Level 2 NZ Certificate – within 12 months of commencement of employment
Level 3 NZ Certificate – within 3 years of commencement of employment
Level 4 NZ Certificate – within 6 years of commencement of employment

14. Questions?

15. 2
Payment mechanism & data collection

16. Why are we making an advance interim payment?
Advance interim payments will be made in the first year to ensure that providers have funds to cover the increased pay rates from 1 July.
The interim process will revert back to normal contracting and funding arrangements within 12 months or earlier if agreed between the Ministry, funders and providers.
Providers have to work through eligibility and translation in order to make changes in their payroll systems – this tool helps you do that.
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.
This information will inform the wash-up in December.

17. Data required from Providers
The Ministry will require data to be submitted by all Providers (including ARC).
The Ministry will be asking for a structured file. It is expected to be made available to Funders and Providers on 10 May 2017.
The data return will also support Providers to understand the impact of:
the translation rules for each of their employees
the additional cost impact for each of their qualifying services and contracts
the estimated provisional payments
A centralised team will be established to co-ordinate and support this process. This team can be reached on

18. Interim payment methodology for HCSS and CRL providers
Estimate additional cost required
Based on estimate, fund Providers in July 2017 and on an ongoing monthly basis.
This payment approach has been developed with the following principles in mind:
To allow Providers to pay for the wage increase to qualifying employees from 1 July 2017;
To transition to business as usual (reflected into normal contracts and prices) as quickly as possible and in the most cost effective and efficient way for the sector as a whole (Funders and Providers);
To consistently implement the settlement across all eligible workers in all Providers;
To allow for the first stage of workforce data gathering on the approximately 55,000 workers;
The Ministry and Funders will continue to substantively fund and manage services through normal mechanisms.
Wash-up process after 6 months to adjust the estimate to ‘actual’ costs.
This interim process will revert back to the normal contracting and funding agreements as usual process within 12 months or earlier if agreed.

19. What the advanced interim (estimate) payments include
Included
Excluded
Additional labour costs (ordinary & overtime hours) for qualifying staff working in eligible services
Non-qualifying staff (e.g. coordinators, enrolled nurses, supervisors or any employee whose primary work purpose is not care and support, even if care and support is incidental to their primary work
Average on-costs less allowances (on costs include the additional training days)

20. Advance interim payment calculation
The payment process 1
Advance interim payment calculation 2
Advance interim payment notification 3
On-going payments
Notification of advance interim payment
Following a central review and checking, funders will be advised of the proposed payment for their providers
Funders will communicate this to their providers
Providers will need to begin payment of the new pay rates from 1 July. Funders will require confirmation from all providers that this has commences as agreed by the first week of July
On-going payments
Payment will be made on the first day of each month starting from 1 July 2017.
The usual contracts payment process (i.e. anything except for the advanced interim payments for the pay equity settlement) will happen in the normal way and will not be affected by this process.
On-going monitoring
Funding is based on anticipated costs
If a providers eligible service significantly changes in volume, over the first half of 2017/18, then this payment may be materially incorrect.
The centralised implementation team will be monitoring payments to proactively flag with Funders the likelihood of this at any time prior to the six monthly wash-up period.
December wash up
Providers submit actual YTD payroll information for period 1 July 2017 to 31 December 2017 and workforce info as at 31 December 2017
The difference between the actual payroll paid info and the advance interim payment will be the wash up
Final wash-up process
YTD payroll info for period 1 July 2017 to 30 June 2018 and workforce information as at 30 June 2018
The difference between the 12 months YTD actual payroll paid information and the advance interim payment and 6 monthly wash-up amount will be the final wash-up amount. 4
On-going monitoring 5
December wash-up
Final (June 2018) wash-up 6

21. Ongoing workforce reporting
As part of the settlement, ongoing workforce reporting is required.
In the interim, until alternative systems are available, the Data Collection Tool will be used for submitting workforce data to the Ministry.

22. Questions?

23. 3
Recap of the key messages

24. What you need to know
Look out for the Data Collection Tool and next iteration of the Operational Policy Document to be released on Wednesday 10 May.
Start lining up resources/suppliers to make payroll system changes – providers are obligated to pay the correct rates to employees from 1 July.
Start gathering evidence of your employees qualifications.
Get started on following the detailed guidance in the next iteration of the OPD to complete the data requirements. Data submissions are due to the Ministry’s central team by Wednesday 24 May.
Contact the Ministry’s central support team on if you have any questions – we’re here to help support you to understand your obligations in the settlement agreement and pending legislation.
Check the Ministry’s website regularly for updates (search: Pay Equity)– newsletters and Q&A’s will be published regularly.

25. Questions?