Annual holidays

2020 has been a crazy year, many of us have had planned trips cancelled or postponed and have either lost money or now hold airline credits that we have no idea when or if we will be able to use.

Annual leave will also have been rescheduled or postponed, but we are now getting to the time when many staff will be considering summer holidays. It needs to be acknowledged that the year has been a very difficult one for many and if staff haven’t managed to have some leave, they probably need to have a break from work to rest and recharge.

An employee’s entitlement for annual leave will be outlined in their employment agreement. The minimum legislative requirement is four weeks entitlement after 12 months continuous employment. ‘Weeks’ means an employee's ordinary working weeks, so a part-time employee who works 3 days per week is entitled to 4 weeks’ holiday of 3 days each, or 12 days per year.

Most employers allow new employees to take leave as it accrues during the first 12 months. Be careful if you allow more leave than accrued, or you could be out of pocket if the employee leaves before they accrue the leave they already have taken. We recommend a signed agreement between you and the employee that allows you to deduct leave taken in advance from the final pay to protect you.

Having a leave policy that formalises the leave application process, will allow you to manage applications fairly, especially, during the popular holiday periods Christmas, New Year and Easter. In our annual leave content we have a template annual leave policy and application form that you can customise to meet your practice needs.

For permanent employees entitled holiday pay is paid at the rate of the greater of the employee’s ordinary pay, or average weekly earnings over the last 12 months. This does not apply to employees returning from parental leave, where there are different requirements.

For casual employees or employees employed for a fixed term of less than 12 months, you may pay holiday pay with their regular pay at the rate of 8% of their gross earnings. 

If any of your employees have irregular or changing work patterns, calculating annual leave and holiday pay entitlement can be complicated. For guidelines on how to manage this see Employment NZ Establishing Entitlements.

As well as organising a leave schedule for your staff that suits the practice, now may be a good time to sort some leave for yourself.

If you have any questions on leave you call the HealthyPractice team on 0800 800 627 or email business@mas.co.nz.