Giving your employees time away from work is vital for the health of your business. Granting leave gives employees a chance to de-stress, recharge their batteries and return to work with renewed motivation and vigour. This often translates into increased productivity, better workplace relationships and improved customer service.
Understanding your legal obligations as an employer makes it much easier to correctly calculate leave entitlements and approve leave applications.
All employees working in New Zealand are legally covered by the Holidays Act (2003), which covers all types of employee leave, including annual leave, holidays, parental leave, sick leave and bereavement leave.
Some of the main points that you’ll need to remember include:
- As an employer, you must keep accurate records of the time and days worked and any leave accrued and taken for all employees. This ensures your records are up-to-date and helps you to avoid costly and unproductive disputes with employees.
- All employees in New Zealand are entitled to leave, dependent on how long they have worked. This includes part-time, casual and fixed-term employees as well as full-time employees. Depending on the circumstances, your employees might need to take unpaid leave.
- All employees are entitled to sick leave and bereavement leave. You need to provide at least five days’ paid sick leave per year to staff after six months’ continuous employment with you, then another five days after each subsequent twelve months’ service.
- All employees are entitled to leave on public holidays. All employees are entitled to a paid day off on a public holiday, regardless of the length of time they have worked for you, if the holiday falls on a day your employee would normally work.
- Employees are eligible for paid and unpaid parental leave depending on circumstances. If your employees have worked for you for longer than six months, they are entitled to government-paid parental leave.
When an employee has completed 12 months’ continuous service, you must:
- give them at least four weeks of paid annual holidays
- give them the opportunity to take at least two weeks together if they want to
- consider any request from an employee to pay out up to one week of their annual holiday entitlement – you are not allowed to ask or pressure an employee to cash up any leave
- keep good records of all leave to avoid disputes and get your calculations right
- give employees at least 14 days notice before an annual closedown.
In addition to providing at least five days paid sick leave to your staff, you’ll need to:
- allow unused sick leave to carry over into the next year – the maximum accumulation is 20 days although you can provide more if you want to
- allow employees to use sick leave to care for a spouse, partner, dependent child or elderly parent
- pay for sick leave days at the rate employees would usually be paid on the day that they take the leave, their relevant daily pay or average daily pay (if applicable).
After six months’ continuous service, employees are entitled to be paid bereavement leave of:
- Three days on the death of their partner, parent, child, sibling, grandparent, grandchild, or their partner’s parent.
- One day on the death of a person outside the immediate family, if you accept that your employee is suffering bereavement. Consider how close the employee and the deceased were, if the employee is responsible for any aspect of the ceremonies, or if they have cultural responsibilities to fulfil around the death.
- Keep good records so you know exactly what employees are entitled to.
In addition to annual holidays, employees are entitled to 11 public holidays each year, if the public holidays fall on days the employee would normally work.
There are two types of public holidays:
- the Christmas and New Year period
- all other holidays.
Special rules apply to the Christmas and New Year holidays. These rules do not apply to any other public holiday. If the Christmas and New Year holidays fall on the weekend and your employees do not normally work on the weekend, the holiday is transferred to the following Monday or Tuesday so the employee is still entitled to a paid day off if they normally work those days.
You may require an employee to work on a public holiday if it falls on a day the employee would normally have worked and the employment agreement specifies that the employee may be required to work on public holidays. If an employee works on a public holiday, they are entitled to be paid time and a half for the hours they work, and if it is an otherwise working day for the employee, they are also entitled to another day off on pay. This alternative holiday recognises that the employee has missed out on having a day off work on a day of national significance and enables them to take a day off at another mutually agreed time.
Eligible employees are entitled to up to 52 weeks unpaid leave and may be eligible to receive payment from the government for 14 weeks of paid parental leave. You don’t have to pay for parental leave unless you have agreed it as part of an employment agreement.
If an employee requests annual leave, you’ll need to:
- Tell your employee about their parental leave entitlements. An employee is eligible if they have worked for you for an average of 10 hours or more per week in at least six months before the expected due date.
- Approve or decline your employee’s request for parental leave within 21 days of receiving all of the required information. Use the Ministry of Business Innovation and Employment – Labour’s Parental Leave Entitlement tool to work out whether your employee qualifies for parental leave. If they don’t qualify, you can decline their request for leave.
- Confirm in writing the parental leave arrangements with your employee.
- Allow pregnant employees to take up to 10 days of unpaid special leave for purposes connected to the pregnancy, such as antenatal checks.
- Allow extended leave of up to 52 weeks of unpaid leave and 14 weeks of paid leave if your employee is entitled to it.
- if your employee has completed six months of continuous employment with your business, you must keep their job open for them for 14 weeks
- if your employee has completed 12 months of continuous employment with your business, you must keep their job open for them for 52 weeks
- if your employee is the partner or father, see the Ministry of Business Innovation and Employment – Labour’s paid and unpaid leave entitlements tool to work out which leave entitlements your employee can take.
The Ministry of Business Innovation and Employment – Labour provides a variety of resources for employers to make it easier to understand and calculate leave entitlements and keep accurate records.
All resources are available on the Ministry of Business Innovation and Employment – Labour website, by using the following links.
- Read the what you need to know about holidays and leave guide
- Use the holidays and leave tool
- Download the wage and holidays record tool
- Use the parental leave calculator
- View the New Zealand public holiday dates
- Complete the parental leave application forms and view sample letters
If you need more information, contact the Ministry of Business Innovation and Employment – Labour on 0800 20 90 20.
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