As margins tighten, some small and medium-sized businesses are turning to family members to help keep their operations running.
However, legal risks can arise when a family "helper" is later found to have effectively been an employee.
Employment lawyers say that when a family relationship unravels due to issues such as divorce, disputes, business failure or succession, a business can face substantial liability if an employment status claim is brought, including back pay and holiday pay owed to the family member.
So where is the line between a relative simply "helping out" and being treated as an employee, and what can business owners do to avoid disputes?
Photo: MINT IMAGES
The answer is not straightforward and largely depends on the arrangement.
Jeanie Borsboom, manager of specialist inspection for the Labour Inspectorate at Employment New Zealand, said it was not unlawful to ask a family member to work for free.
But whether that arrangement was lawful depended largely on whether both sides clearly understood and accepted it as being voluntary, she said.
"To avoid disputes, people need to be really clear with each other what the arrangement is," she said.
"It could be purely voluntary, with no expectation of reward, so the person who is working does not expect to be paid. If they agree to that, then that's not an unlawful arrangement," she said.
"But if they agree that the person will be paid...
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