The issue with 90-day trial periods

Here’s what you need to know

While a 90-day trial period can be useful for small employers – reducing the risk of making the wrong choice when taking on an employee – it’s not as straightforward as you might think. There are stringent guidelines you need to follow if you want to avoid a mess later.

The good news is that with the correct information and careful planning, you can use this system to reduce the risk of making the wrong decision with a new hire. Here’s what you need to know.

90-day trial period criteria

There are specific criteria you must meet to use a 90-day trial period:

  1. You must have 19 or fewer staff members at the time your new employee starts
  2. The new employee can’t have worked for you before in any capacity.

Here’s a closer look at the details. Can you tick both above boxes? Good. But there are several other factors to get in order:

  • It must be agreed upon before the employment start date.

Your new employee must agree to the 90-day trial period in writing before starting work. That means you and the employee must sign the employment agreement before they do any work for you – even half an hour.

  • An employee must have time to consider the agreement.

An employee must legally have time to review the agreement and ensure they’re happy with it. To give them plenty of time, it’s a good idea to give them the agreement at least a week before their first day.

  • The clauses must be up-to-date and relevant.

Details about the trial period must be written in the employment agreement. It needs to clearly cover meanings and what section of the Employment Relations Act they relate to. Because employment law is constantly changing, employers need to ensure their employment contracts are created by a specialist who is up to speed with the latest legislation.

  • Personal grievances can still be made.

When done correctly, the 90-day trial period protects an employer from a personal grievance for unjustified dismissal. But an employee still has the right to raise a grievance for other concerns such as discrimination, harassment or unreasonable disadvantage.

  • Notice must be given within the trial period.

If you decide the new employee isn’t a good fit, you must give notice within the 90-day trial. If the employee stays a bit longer than the ninety days to work out their notice period, that’s okay.

Giving your new employee the best start

Of course, a 90-day trial is a reassuring fallback if things don’t work out. But taking on a new employee is a significant investment of both time and money, and you want to do your part to ensure things work out for the best. Here’s how:

  • Ensure they know what’s expected

Before they start, ensure your new employee knows what’s expected from them and what success and failure look like in the role and your business.

  • Check-in regularly

Put yourself in your new team member’s shoes – starting a new job can be daunting, and there’s always a settling-in period. Check regularly to find out how they’re feeling and offer feedback on their performance compared to the expectations. If they know you’re looking out for them, they’ll feel valued and more at ease in their new role.

  • Provide direction

If you have concerns that your new employee isn’t fulfilling expectations, keep them in the loop. Outline what they need to do differently to successfully get through their trial period and give them time to make changes.

When you need to terminate employment  

Sometimes, things don’t work out with a new team member, even with the proper planning and procedures. If you suspect this is the case, here are the next steps:

  • Act early

If it looks like the new employee isn’t going to work out, don’t wait to see if things change – give yourself time to work through the process correctly.

  • Contact the experts  

New Zealand employment law is constantly changing, and there are many legalities when ceasing someone’s employment under the 90-day trial period. You don’t want to get any of it wrong. Contact an HR advisor or consultant to advise you on your options and guide you through the process if you need to exit your employee.

90-day trials – know the facts

A 90-day trial period is a wonderful tool for small employers. It can help protect you when new employees don’t work out and offer guidelines on how to act. But, if you don’t manage it correctly, you could find yourself in a bigger mess later. If you need guidance before hiring your next team member, give us a call – we’re always here to help.