Are your employees missing out on annual leave entitlements?

Workplace Relations Minister Iain Lees-Galloway has announced a long-awaited review of the Holidays Act.

“With an increasing variety of work patterns and pay arrangements, the law's requirements were proving difficult and costly for employers to apply, and employees were not receiving their full entitlements” said Lees-Galloway.

The review follows calls from the HR profession and union groups to provide simplify the rules that currently create confusion and pave the way for miscalculation.

Holiday pay is currently calculated based upon what would give employees the most money - the weekly pay at the start of the holiday or the average weekly earnings over the past 12 months. However, this can be confusing when dealing with flexible working arrangements.

Lees-Galloway said New Zealand needed a law that provided certainty to employers and employees so employees received their correct entitlements.

"It's clear we need to look at the Holidays Act with a fresh pair of eyes and ensure it is fit for modern workplaces and new working arrangements," he said.

"The legislation needs to be straightforward and simple to implement, and deliver fair rest and entitlements for workers."

This change will be welcome news for the New Zealand HR profession, who revealed in a recent HRD survey that the Holidays Act was one of the profession's frustrations.

John Milford, chief executive of Business Central, added that previous reviews have shown that there is real confusion implementing the Holidays Act, “given the complexity and onerous requirements of the Act itself”.

“We need to ensure we don’t have the current challenges of leave calculation. Instead, we’ve got to make it easier for employers and payroll and ensure employees receive their correct entitlements,” said Milford.

"Businesses want to do the right thing by their staff, properly and transparently, making sure they get the leave and entitlements they’ve worked hard for. Let’s get this fixed.

“We look forward to the Working Group’s interim report, final report recommendations, and the outcome of a workable system.”