When it comes to holidays, 2022 has been a bumper year for kiwis, with two additional days of paid leave gifted to employees, courtesy of a permanent new public holiday to mark Matariki in June, and a special one-off holiday marking the passing of the late Queen Elizabeth II in September. And while most employees have rejoiced at the extra paid leave, there’s no disputing it can cause somewhat of a headache for the employers responsible for funding and managing their additional statutory obligations.
The primary legislation guiding employers is, of course, the Holidays Act 2003, which outlines employees’ minimum entitlements to annual leave, public holidays, sick leave, bereavement leave and family violence leave. This Act, which applies to all employers and employees, except those in the armed forces, is often criticised for its complexity and, as such, is currently under review. Following the Government’s acceptance of the Holidays Act Taskforce’s recommendations, a team is now working to provide greater clarity for employers and employees alike around entitlements to, and payment for, holidays and leave. You can read more about the changes being considered on the Ministry of Business, Innovation and Employment website.
So, what does this means for employers?
Right now, nothing. Until any changes come into force, the current legislation stands, which means employers are responsible for providing the correct entitlements and payments to employees and also retain an obligation to remediate workers for historical underpayments. Employers must also keep a holiday and leave record specific to each employee and take active steps to ensure that employees take the holidays they are entitled to.
All of this can be really good for your business.
Whilst it might feel expensive, employee leave should be viewed as a business investment. Holidays provide employees with the opportunity for rest and recreation, and a study by the America’s International Foundation of Employee Benefit Plans confirms that that employees who take their annual leave are 40% more productive, as well as being less irritable, depressed, forgetful and easily fatigued compared to employees who don’t.
On the flip side, employees who do not take regular holidays have been found to be at higher risk of sustaining workplace injuries.
Holiday season is fast approaching.
At the risk of saying the ‘C’ word too early, one of the most popular holiday seasons is just around the corner. We have four public holidays close together over December and January and many kiwis will be looking to use their annual leave entitlements to take a summer break. If you have the right systems in place, you should have clear visibility over the annual leave balances of each of your employees. If you don’t, we recommend getting on to this with a sense of urgency. Make sure you know what your people are entitled to and plan ahead so you’re not caught short. And if you’ve got contractors on your team, or are looking to bring some in to cover the busy holiday period, make sure you understand the difference in their entitlements and your responsibilities – there are many!
New year, new rules?
The Holidays Act Taskforce team expects to introduce the amended Bill in 2023. Once the parliamentary process is complete and the Bill enacted, we can expect a transition phase before it comes into force. Payroll providers and employers have been told to expect plenty of time and guidance to prepare for the changes. Consultation with stakeholders has also been promised to ensure the timing of any changes is workable in practice.
Need more clarity?
A quick check in when it comes to entitlements and obligations can go a long way, so feel free to get in touch to discuss any employment law or HR support queries. Our initial chat is always free, and if you decide you’d like some independent, impartial and up-to-date support, you can make use of our qualified HR and employment law expertise for as little as an hour, or as long as you’d like. It’s up to you.