[New Zealand] Proposal to make sick pay and holiday pay more equitable

In New Zealand, as the Government reviews the Holidays Act, an academic at the University of Otago has urged it to consider how more equity could be built into its approach to sick pay and public holidays, Newsroom reports.

Associate Professor Paula O’Kane researches multiple aspects of work and is based in the Department of Management at the University of Otago. She shares details of how the draft bill could go further:

“At present, each employee in New Zealand receives 10 days of sick pay per year after they have been working for their organisation for six months, up to a maximum accrual of 20 days. Some organisations offer more days per year or longer accruals or both, as part of their enhanced benefits.”

The draft bill reportedly proposes shifting from an annual entitlement to an accruals system, using pro-rata pay. However, Prof. O’Kane suggests that this could go further.

She said, “Positively, accruing paid sick leave on a pro-rata basis from the day we started our first job makes access to paid leave more immediate.

“If we add to this removal of a maximum accumulation and manage it in a centralised government system (a little like ACC but with individual accrual), transferrable between jobs, we could create more equity in the sick pay system for employees and employers. This could be managed in the IRD system.

“When an employee changes job, their accrued sick leave moves with them, and while the dollar value may not equate directly if they move to a higher earning job, it is still better than beginning accrual again.

“Regardless of how many hours or days a week a person works, currently everybody receives 10 days annually from each job they work.”

Prof. O’Kane continues, “A part-time employee may also be working more than one job and so could technically have double or triple the number of sick days a full-time worker has. Though this probably only occurs in a minority of cases, it does create inequity in the system. Accrual based on hours worked can negate this anomaly.

“By creating a system where sick leave is centralised, it puts employers on an even playing field. All employers pay the pro-rata amount in their pay runs per employee into the employee’s centralised pot, rather than only paying when an employee is sick. Employees would earn their sick leave not at 10 days a year, but at a percentage of their pay equivalent to 10 days per year (about 4 per cent).”

Source: Newsroom

(Quotes via original reporting)

In New Zealand, as the Government reviews the Holidays Act, an academic at the University of Otago has urged it to consider how more equity could be built into its approach to sick pay and public holidays, Newsroom reports.

Associate Professor Paula O’Kane researches multiple aspects of work and is based in the Department of Management at the University of Otago. She shares details of how the draft bill could go further:

“At present, each employee in New Zealand receives 10 days of sick pay per year after they have been working for their organisation for six months, up to a maximum accrual of 20 days. Some organisations offer more days per year or longer accruals or both, as part of their enhanced benefits.”

The draft bill reportedly proposes shifting from an annual entitlement to an accruals system, using pro-rata pay. However, Prof. O’Kane suggests that this could go further.

She said, “Positively, accruing paid sick leave on a pro-rata basis from the day we started our first job makes access to paid leave more immediate.

“If we add to this removal of a maximum accumulation and manage it in a centralised government system (a little like ACC but with individual accrual), transferrable between jobs, we could create more equity in the sick pay system for employees and employers. This could be managed in the IRD system.

“When an employee changes job, their accrued sick leave moves with them, and while the dollar value may not equate directly if they move to a higher earning job, it is still better than beginning accrual again.

“Regardless of how many hours or days a week a person works, currently everybody receives 10 days annually from each job they work.”

Prof. O’Kane continues, “A part-time employee may also be working more than one job and so could technically have double or triple the number of sick days a full-time worker has. Though this probably only occurs in a minority of cases, it does create inequity in the system. Accrual based on hours worked can negate this anomaly.

“By creating a system where sick leave is centralised, it puts employers on an even playing field. All employers pay the pro-rata amount in their pay runs per employee into the employee’s centralised pot, rather than only paying when an employee is sick. Employees would earn their sick leave not at 10 days a year, but at a percentage of their pay equivalent to 10 days per year (about 4 per cent).”

Source: Newsroom

(Quotes via original reporting)