Holidays Act changes are not law yet!

There has been a lot of media interest in changes to the Holidays Act. However, these proposals are not law yet. A snapshot of what is on the horizon for holidays includes:

Matariki

In February 2021, the Prime Minister announced the introduction of a public holiday for Matariki, to be first celebrated on 24 June 2022. This is proposed to be achieved through an amendment to the Holidays Act this year. 

Extended Sick leave

The Holidays (Increasing Sick Leave) Amendment Bill was reported by the Select Committee this week, with a second reading of the Bill to now be heard in Parliament. 

The Bill proposes an increase from 5 to 10 days of sick leave per year, with up to a maximum of 10 days’ sick leave able to be carried over to a subsequent 12 month period of employment, up to a maximum of 20 days’ current entitlement in any year.

Holidays Act Taskforce

In February 2021, the Minister of Workplace Relations and Safety released the Holidays Act Taskforce Report. The Taskforce was established in 2018 compromising Government, Union and Business representation, to review the Holidays Act. The purpose of the review was to make recommendations to Government for a clear and transparent set of rules for providing entitlements to, and payment for, holidays and leave.

The Government has accepted all of the Holidays Act Taskforce’s recommended changes. However, it is important to note that these are recommendations only. They will be drafted into legislation to be introduced this year. 

The Taskforce Recommendations include:

• New methodologies for holiday and leave payment calculations (including annual leave, family violence leave, bereavement leave, sick leave, alternative days, and public holidays);
• That employees should be entitled to take annual holidays in advance on a pro-rata basis;
• A formula for determining whether a day is an 'otherwise working day' for the purposes of sick leave, public holidays etc;
• That employees should become entitled to one day of sick leave from their first day of employment, with an additional day per month provided until entitlement is reached;
• Broadening bereavement leave entitlements to include more family members, cultural family groups and modern family structures;
• That employees should become entitled to family violence leave and bereavement leave from the outset of employment;
• Holidays being accrued at full value during parental leave;
• A requirement for payslips for all employees, each pay period detailing used and remaining leave entitlements and how these have been calculated;
• Gross earnings to be clarified by statute to include all discretionary payments (but not reimbursements);
• Regular review of ‘pay as you go’ arrangements.

We recommend making the most of the opportunity for making submissions on such significant legislative reform. For some, the recommendations are considered to be an opportunity lost. They do little to address the complexity of holiday pay issues New Zealand businesses face. Accrual and calculation methodology for leave is not simplified.

For more information on wage and time, holiday/leave provisions, we recommend you contact a member of our specialist employment law team. We can also assist you with drafting submissions on any Bill introduced. Phone: 07 282 0174.

NOTE - Since publication of this article, the Holidays (Increasing Sick Leave) Amendment Bill has now been granted Royal assent and become legislation. The changes to sick leave entitlement set out above will come into force from 25 July 2021.