This week Cabinet agreed to repeal and replace the Holidays Act 2003 and replace it with a new and simplified Employment Leave Act.
The purpose of the new Act will be to streamline the current system around leave entitlements and benefit both employers and employees.
The key changes include:
– A shift to hours-based accrual for sick and annual leave.
– A shift to pro rata sick leave: proportionate to hours actually worked.
– Leave Compensation Payment for casual employees: casual employees will generally see an increase to their pay by receiving an upfront payment of 12.5% for each hour worked, instead of accruing annual and sick leave or receiving the current 8% Pay-As-You-Go payment.
– Leave Compensation Payment for additional hours worked: any hours worked on top of contracted hours will not accrue annual or sick leave but workers will receive an upfront payment of 12.5% for each additional hour worked.
– Family violence and bereavement leave: from the first day of employment.
– Returning from parental leave: full pay for annual leave upon return from parental leave.
– Mandatory pay statements: employers will now be required to provide clear pay statements each pay period, itemising pay and leave in a way that’s transparent and easy to understand.
– Cashing up annual leave: more flexibility – ability to cash up 25% of total annual leave balance each year.
Workplace Relations and Safety Minister Brooke van Velden stated that her ambition was to pass a new Act by the end of term and that goal remains on track.
A 24-month transition period will apply once the new Act is passed into law to ensure a smooth transition for employers and payroll providers.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
