A major overhaul of the Holidays Act 2003 is underway, which is welcome news because this is a notoriously tricky Act for businesses to comply with.

Many businesses have been caught out over the years, including Bunnings, NZ Post and McDonalds. Even the NZ Police, several local councils and MBIE have found themselves with big wage bills to pay after unintentionally underpaying staff for holidays.

The new legislation is designed to make it simpler for businesses to correctly calculate holiday pay, and it looks set to be introduced in early 2022. In the meantime, though, you’ll still need to comply with the existing Act.

Keep accurate and up-to-date records

You don’t want to underpay or overpay your staff members, so it’s important to keep accurate records of when they work. This includes:

  • Records of the hours each person has worked and what they were paid for those hours
  • Annual leave accrued and taken
  • Sick leave and bereavement leave taken
  • Any public holidays worked and what was paid for those hours
  • Keep all your records up to date.

Workers may also be entitled to domestic violence leave or parental leave, and they can apply for unpaid leave.

Tools and guidance

You can use the Holiday Tool from Employment New Zealand to help you work out what to pay someone when they are on leave. You can also read more tips for compliance here.

Or you can give us a call. We can help you sort out your payroll and make certain you’re complying with the Holidays Act, even in complex situations with part-time employees.