The purpose of the Holidays Act 2003 is "to promote balance between work and other aspects of employees' lives and, to that end, to provide employees with minimum entitlements to:
a) Annual holidays to provide opportunity for rest a recreation
b) Public holidays for the observance of days of national, religious, or cultural significance
c) Sick leave to assist employees who are unable to attend work because they are sick or injured, or because someone who depends on the employee for care is sick or injured
d) Bereavement leave to assist employees who are unable to attend to work because they have suffered a bereavement."
The Ministry of Business, Innovation and Employment (MBIE) has been investigating payroll systems during the past few years to assess whether or not they were strictly compliant with the Holidays Act.
In May 2018 an announcement was made that a working party would be set up to review the Holidays Act.
This review has been commissioned by the New Zealand Government following a joint request from unions and employers and will focus particularly in the assessment of the provision of payment for holidays and leave entitlements as well as other issues that may arise in the course of their work.
The main question here is now: do still Kiwi businesses need to comply with the Holidays Act while the review is ongoing?
Carolyn Jones, Agilyx New Zealand Principal HR & Payroll Consultant, advises: "Yes, until the Holidays Act is amended, employers are required to comply with the Act as it currently stands. Where remediation requirements have been identified, remediation is to continue to be processed."
It is also very important to know that the review will not consider the issue of remediation of historical underpayments of holiday and leave pay. The new regimen will happen in a couple of years and in the meantime, employers have the obligation to pay employees correctly.
If you want to assess your payroll systems, this checklist made by Employment New Zealand can be useful: