The Employment Leave Bill has passed its third and final reading, ushering in a long-awaited overhaul of the law that provides employees with employment leave entitlements.
Workplace Relations and Safety Minister, Brooke van Velden said the Bill delivers on the Government’s priority to replace the broken Holidays Act with a leave system which is simple and straightforward.
“Kiwis have been asking Governments to do something about this legislation for years, and in particular they have been asking for an hours-based accrual system. Successive governments have put it on the to-do list, but nothing came to fruition. This Government has listened, and I am proud that this reform has finally been delivered,” said Ms van Velden (pictured).
Key aspects of the Bill include:
- Annual and sick leave accrued in hours, in direct proportion to standard hours of work;
- Annual, sick, bereavement and family violence leave available from the first day of work;
- Use of a single hourly rate for paying leave, across all types of leave;
- A new 12.5% Leave Compensation Payment for additional and casual hours, instead of accruing annual leave and sick leave for those hours;
- Mandatory pay statements that itemise pay and leave in a way that’s transparent and easy to understand;
- Greater flexibility to cash up annual leave, with workers able to cash up 25% of their total annual leave balance each year;
- A new Otherwise Working Day test for those who work additional days or do not have a specified pattern of work;
- Removal of annual leave payment penalty for those returning from parental leave.
The Minister said the changes to the new leave system will have a 24-month lead-in to allow time for a careful and managed transition by businesses and payroll providers, and there will be an additional year after the Act comes into force to update leave terms in employment agreements.
MBIE will provide comprehensive guidance to support implementation on its Employment New Zealand website. Initial guidance and a timeline for further guidance and resources will be available once the Bill receives Royal assent.
