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Payroll greater than $2.5m?

ACC has started reviewing employers with payroll greater than $2.5 million.

 ACC regularly reviews industries, but this is the first time we have seen a cross industry / cross levy code review.  This is also the first time ACC have told us about the review before it starts. Although this shows that they want to work with us, it also raised a red flag – why would they tell us about it unless it was going to cost our clients more?

An ACC review looks at whether you are on the right levy code.  You may well be thinking that you have no worries and that everything is fine.  Personally, I am not that comfortable.

The reason being is that we have gone through far too many of these reviews to trust the process and intent.  The following sentence is taken from an ACC client communication that was sent out on 1 October 2019.  “…if there is a need to update the clients’ levy classification it will likely result in an increase in their levies…”.  Please note that there is no mention that it perhaps may result in a reduction, and that this change could be backdated 8 years, and that this may incur a 6% use of money interest payment.

This sentence was purely based on ACC reviewing our client’s website.  Please note that ACC does not have to contact you and discuss your activities in changing the levy code.  It can basically make a determination and send you an updated invoice.  Oh, and ACC can backdate this too. 

Wonder how all your other insurances compare to this?

Sadly, the legislation allows ACC to do this.  We do not agree, strongly so and have shared this with ACC on a number of occasions.  It takes a wee bit longer to change legislation, so we prefer to focus on the practical solutions.

Website: what does your website say about your business?  Do you promise everything i.e. a turnkey solution even though you may not do everything?  If so, whatever you commit to on your website ACC uses in understanding what you do.  Sure, it doesn’t quite align to all the principals of levy setting however ACC’s argument is that if you promote the activity then we (ACC) should be able to use it to set your levies. 

ACC Questions:  depending on the dollar value of the increase ACC may phone you to ask questions about your business activities.  Please apply good legal prowess here and do not answer anything over the phone.  Get everything in writing and carefully consider what ACC is asking you.  Please make sure everyone in the company who answers phones is aware of this policy as ACC will use whatever information they are given by anyone in the company.

Understand the Rules:  Common sense does not apply with how the ACC legislation works.  What you think is clear and easy is not necessarily the case.  ACC will take the highest risk activity in your business regardless of the level of revenue it creates.  Or as noted above, if it is listed on your website that is enough for your levy code to change.

If this leaves you scratching your head then that’s ok, it does for most folks.  That is why we exist, to make sure you are treated fairly and equitably.  Our team who are made up of both ex ACC people and the likes of myself, know the system better than most.

If you have been contacted by ACC, please contact our ManageACC Manager Sue Walton.  We have agreed to prioritise this work given the potential financial impact on your business. 

Sue Walton 0800 747 569 / sue@managecompany.co.nz

Debbie Welsh