Employee leave entitlement – where to begin?
In 2019 the Government established the Holidays Act Taskforce to suggest improvements to the Holiday Act 2003. The taskforce included employers, workers, and government representatives and the purpose was to address the lack of clarity regarding an employer’s obligations and an employee’s leave entitlements.
A report was subsequently presented to the Government and the recommendations outlined have been accepted.
But what does this mean?
The Holiday Act Taskforce recommendations
The Taskforce made 22 recommendations. Primarily they concern revising how employers calculate and pay leave, and the degree of transparency an employer provides regarding an employee’s leave entitlements.
Out of the 22 recommendations you will be familiar with changes to the Act that have already been implemented:
- The Holidays (Bereavement Leave for Miscarriage) Amendment Act 2021, entitling employees to three days of bereavement leave for miscarriage or stillbirths.
- The Holidays Amendment Act 2021 which increased sick leave entitlements from five days to 10 days per year.
- Te Kahui o Matariki Public Holiday Act 2022 introduced Matariki as a public holiday.
Summary of recommendations
These are the highlights of proposed changes as provided by MBIE. If you are interested in seeing more details, the full Holiday Taskforce report can be downloaded here, and the Government response fact sheet here.
The employee leave entitlement changes will introduce more transparency and clarity
- There will be new clear and transparent rules and definitions for determining, calculating, and paying leave entitlements so that employers can have greater confidence that they are meeting their obligations under the Act and their employees are receiving their correct entitlements.
- The greater clarity around calculating and paying leave will support employees to better understand what their entitlements are.
- Employers and employees will benefit from greater transparency, with payslips required for each pay period, detailing used and remaining leave entitlements and how these are calculated.
Changes will increase access to some employee leave entitlements
From their first day of employment eligible employees will be entitled to bereavement leave and family violence leave and will begin accruing sick leave.
Bereavement leave will be expanded so that employees can access three days leave for more family members, including cultural family groups and more modern family structures.
The parental leave override will be removed, meaning that employees returning from parental leave will be paid at their full rate for all their annual holidays.
Holland Becket Law further distils what the changes could look like as they relate to annual holiday leave, FBAPS (Family Violence, Bereavement, Alternative Days, Public Holidays & Sick) leave, alternative holidays, and pay-as-you-go leave. Regardless, the Holiday Act 2003 is complex, and the proposed changes have yet to be fully implemented. We will have to wait and see whether they will achieve the desired outcome of simplicity and clarity or put more pressure on businesses as employee leave entitlement increases.