August 2019 update

With only one month to go until spring your employees might be thinking about booking their summer break or booking holidays on-line because the deal is too good to refuse. This month we are looking at all types of leave.

Annual leave

The ‘too good to refuse’ on-line holiday that is booked and paid for before leave is even mentioned to the practice is becoming quite a frequent query through the helpdesk.

All employees are entitled to a minimum of four weeks leave after 12 months’ continuous employment.  A week is their normal working week, so an employee who works 3 days per week is entitled to 12 days leave per year. Many agreements allow for more generous entitlements.  Employment agreements usually state that “annual holidays are to be taken at a time that is agreed by you and us” and go on to say that although the practice will try to accommodate requests, they also have a duty to meet the business needs.

Developing a policy that outlines the process for applying for leave will assist in the management of leave requests and hopefully make the process fairer when trying to allocate leave at popular times of the year.

Managing employees leave balances is important to manage the potential financial risk of large holiday leave pay outs when employees resign. Some employment agreements document the amount of leave an employee can accumulate. Employers can direct employees to take leave, you must give at least 14 days’ notice, and this only applies entitled leave.

Public Holidays

In New Zealand we are lucky to have eleven Public Holidays each year.  Employees are entitled to be paid for these if they fall on a day which would “otherwise of been a working day”.

If an employee is required to work, and it is a usual working day, then they are paid time-and -a half for the hours worked, plus receive an alternative paid days leave. If they choose to work but it is not a usual working day, then they are paid time-and-a-half but don’t receive an alternative days leave.

‘Mondayisation’ of some holidays and employees where there is on–call component can add complications. You can read more about this in our website content.

Sick leave

After 6 months continuous employment employees are entitled to a minimum of 5 days sick leave per year. This applies to part-time employees as well as it is not pro-rated.  Sick leave can be accumulated up to 20 days. Some employment agreements allow for more generous entitlements.

Sick leave is paid at the relevant daily pay, or in some cases average daily pay, if it is not practical to work out the relevant daily pay.

If the sick leave entitlement is exhausted, you can agree to the employee using their annual leave instead. Employees who overuse their sick leave entitlement or are on extended leave may require careful management.

Parental leave

The entitlements under the Parental leave and Employment Protection Act have become more generous and provide more flexibility for today’s working environment.   The entitlements and the eligibility for parental leave are spelt out in the Employment NZ factsheet.

Depending on the length of employment, employees and self-employed are entitled to paid primary carer leave of up to 22 weeks. Additional paid leave is available to the primary carers of premature babies and for this group there is more flexibility around returning to work and paid parental leave.

The leave also comprises of unpaid special leave of 10 days to attend pregnancy related appointments, partners leave and extended leave of up to 52 weeks for some employees. 

Domestic violence/Victim protection leave

The Domestic Violence – Victim Protection legislation came into effect on 1 April 2019. The purpose of the Act is to provide people affected by domestic violence a minimum entitlement to paid leave to assist with dealing with the effects.

The legislation will allow employees affected by domestic violence

• an additional 10 days leave per entitlement year (after the initial 6 month criteria)
• to request short term variation to their working arrangements of not longer than 2 months. Requests must be dealt with in the same way as any request under the Flexible Working arrangements

The criteria for entitlement to this leave will be after 6 months continuous employment or if the employee over the previous six months has worked

• at least an average of 10 hours a week during that period
• no less than 1 hour in every week during that period or no less than 40 hours in every month during that period.

Domestic violence leave can be requested if the employee has been affected by domestic violence, regardless of how long ago the violence occurred, even if it is prior to the current employment.

Employers and employees may agree that domestic violence leave can be taken in advance, but any leave in advance will be deducted from the entitlement.

Unpaid leave

Many employees assume that they are entitled to take unpaid leave, but employers don’t have to grant this if it doesn’t fit the business requirements.

There are implications for employees, if the unpaid leave is for longer than one week - unless agreed otherwise, it may affect their continuous employment, and their anniversary date can be moved out by the length of unpaid leave less one week. Unpaid leave also affects KiwiSaver contributions and income insurance cover.