[New Zealand] Holidays Act reform

In New Zealand, Brooke van Velden - the Minister for Workplace Relations and Safety - has announced that an exposure draft of a Bill to implement reforms to the Holidays Act will be released for targeted consultation in September 2024, Ministry of Business, Innovation and Employment reports.

The Government said it was aware of issues with the Holidays Act and that these have been a longstanding concern for workers, employers and payroll providers. It said that resolving these issues is a priority.

The Government has reportedly agreed that the exposure draft of the Bill will include some changes and additions to the previous Government’s decisions on the reform of the Act.

An exposure draft is a version of a draft Bill released by a government agency for public consultation before the Bill is introduced to Parliament. According to the Ministry of Business, Innovation and Employment, releasing an exposure draft is a different process from the release of a Bill by a Select Committee for public consultation. This will still happen once a Bill is introduced.

The primary focus of the changes is simplifying calculations and reducing the cost to employers for implementing them. 

The exposure draft will reportedly include (together with other changes):

• a proposed approach to pro-rating sick leave so that there is some proportionality to how much an employee works;
• moving from a weeks-based entitlement system to a weeks-based accrual system for providing annual leave entitlement;
• simpler methodologies for calculating use of leave that do not require pay systems to access data about daily hours of work;
• objective criteria for using pay-as-you-go for annual leave and a less burdensome review process; and
• clarification that only full pay periods need to be included in 13-week reference periods.

Employers’ obligations

All the existing rules still apply until any changes to the Holidays Act go through the parliamentary process and come into force. Employers therefore still need to comply with the current Holidays Act and ensure that they provide the correct entitlements and payments to employees.

Employers also reportedly retain an obligation to remediate employees for historical underpayments that have occurred due to non-compliance with the current Holidays Act.

Source: Ministry of Business, Innovation and Employment

In New Zealand, Brooke van Velden - the Minister for Workplace Relations and Safety - has announced that an exposure draft of a Bill to implement reforms to the Holidays Act will be released for targeted consultation in September 2024, Ministry of Business, Innovation and Employment reports.

The Government said it was aware of issues with the Holidays Act and that these have been a longstanding concern for workers, employers and payroll providers. It said that resolving these issues is a priority.

The Government has reportedly agreed that the exposure draft of the Bill will include some changes and additions to the previous Government’s decisions on the reform of the Act.

An exposure draft is a version of a draft Bill released by a government agency for public consultation before the Bill is introduced to Parliament. According to the Ministry of Business, Innovation and Employment, releasing an exposure draft is a different process from the release of a Bill by a Select Committee for public consultation. This will still happen once a Bill is introduced.

The primary focus of the changes is simplifying calculations and reducing the cost to employers for implementing them. 

The exposure draft will reportedly include (together with other changes):

• a proposed approach to pro-rating sick leave so that there is some proportionality to how much an employee works;
• moving from a weeks-based entitlement system to a weeks-based accrual system for providing annual leave entitlement;
• simpler methodologies for calculating use of leave that do not require pay systems to access data about daily hours of work;
• objective criteria for using pay-as-you-go for annual leave and a less burdensome review process; and
• clarification that only full pay periods need to be included in 13-week reference periods.

Employers’ obligations

All the existing rules still apply until any changes to the Holidays Act go through the parliamentary process and come into force. Employers therefore still need to comply with the current Holidays Act and ensure that they provide the correct entitlements and payments to employees.

Employers also reportedly retain an obligation to remediate employees for historical underpayments that have occurred due to non-compliance with the current Holidays Act.

Source: Ministry of Business, Innovation and Employment