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Payday Filing - Why are terminated employees being reinstated

NZ Terminated Employees being reinstated by IR via Payday Filing

IR have confirmed that for all scenarios where an employee’s Termination Date is before the Pay Period Start Date this is triggering IR's rehire workflow and such reinstating the employment relationship.  

This is not something you or PG or any other software provider have done wrong, it is due to IR not catering for these scenarios.
This impacts Gateway users who use the Auto Send feature the most but will also impact all other Payday submissions/Files where the ED termination data is sent before the EI data.

  • For those using the FileUpload service the workaround is send the Termination ED after sending the EI (not before as is usually expected).
  • For those using the Gateway service the workaround is to login to MyIR and manually end the relationship (as you have now done).

This workaround will remain in place until IR have updated the Payroll/PayDay Specifications with improved business rules. Unfortunately they cannot give us an ETA in that at this time.

A few scenarios where it is legitimate to have the employee Termination Date before a pay period start date are:

  • Deceased employees – their official termination date is the employee’s date of death, but their final pay is not made until the payroll person receives a letter from the executer of the employee’s estate. That can take 3-6month or longer.
  • Employees in with a legal disputes - These employees might get all their leave paid out on the last day they perform work but if there’s court action involved in the termination process and the employer is forced to pay outstanding monies, then that could go into a post termination pay.
  • Employees that go on parental leave and don’t return, legislation states the termination date must be set to the date they went on parental leave not the date they advise they are not coming back to work.
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