Payroll Bulletin 10

TYPES OF LEAVE IN NEW ZEALAND

There are several types of leave in New Zealand:

- Annual Leave
- Sick Leave
- Bereavement Leave
- Parental Leave
- Public Holidays
- Family Violence Leave
- Unpaid Leave

In addition, there are other types of leave, e.g., Jury Service leave, Employment Relations Education Leave, etc. 

We have provided below brief descriptions of employers’ legal obligations in regard to leave 

ANNUAL LEAVE

As per the NZ law, an employer must give their employees at least 4 weeks paid annual holidays (annual leave) – and keep accurate records of what employees are entitled to and have taken.

Your employees become entitled to a minimum of 4 weeks annual holidays when they have worked continuously for you for 12 months.

You can, however, choose to: 
- give employees more than their minimum entitlement of 4 weeks of annual holidays each year – this should be documented in their employment agreements
- allow employees to take annual holidays before they are entitled to them (in advance).

An employee’s annual holiday entitlement does not expire. The employee remains entitled to their annual holidays until they:
- take the holidays
- cash them up, or
- their employment ends, and they are paid out for them

In some cases, you can agree with an employee that they be paid 8% of their gross pay instead of getting paid annual holidays – referred to as ‘pay-as-you-go’ holiday pay. This can only happen if the employee:
- has a fixed-term contract of less than 12 months, or 
- works so irregularly that it is impossible in practice for you to provide them with 4 weeks’ annual holidays in the normal way

How Leave without pay affects annual holiday entitlements

If an employee takes more than a week of unpaid leave at any point during the year: 
- the time required before the employee becomes entitled to annual holidays is extended by the amount of unpaid leave taken more than one week. For example, if an employee takes 2 weeks unpaid leave, they become entitled to annual holidays one week after the anniversary of their starting date, or
- you can agree with the employee that taking the unpaid leave will not affect their annual holidays anniversary date, but their average weekly earnings calculation must be adjusted to reflect the number of whole or part weeks greater than one week that the employee was on unpaid leave. For example, if an employee takes 2 weeks unpaid leave during the year, you can agree that the anniversary date doesn’t change and the average weeks earnings for annual holidays pay is calculated based on a 51-week year, instead of 52 weeks.

Time off without pay while an employee is receiving ACC, on parental leave, or on leave for defense force volunteers protected voluntary military service, does not affect their anniversary date for annual holiday entitlement.

SICK LEAVE

Eligible employees are entitled to 10 days of paid sick leave each year to care for themselves, their partners and children, or other dependants.
Sick leave can be used for any illness or injury, including stress.
Sick leave entitlements are not pro-rated (assessed proportionately). Even if a part-time employee only works 3 days a week, they still get 10 days sick leave a year and can accumulate up to 20 sick days a year.

All employees (including part-time and casual employees) are entitled to 10 days of sick leave each year once:

- they have been working for you continuously for 6 months, or
- they have worked for you for a period of 6 months for:
   - an average of 10 hours per week, and
   - at least 1 hour in every week or 40 hours in every month.

If, in any year, an employee does not meet the criteria:

- they do not get any new sick leave entitlement
- they can still use any sick leave balance carried over from the previous year.

Your employees should let you know as soon as possible when they need to take a sick day.

BEREAVEMENT LEAVE

Bereavement leave can be taken at any time and for any purpose relating to the bereavement. It does not have to be taken straightaway or on consecutive days.

All employees (permanent, fixed-term, part-time and casual) can use bereavement leave if:

- they have worked for you continuously for 6 months or:

- they have worked for you for 6 months for an average of 10 hours per week, and at least 1 hour in every week or 40 hours in every month.

Employees are entitled to bereavement leave every 12 months, as long as they meet the above criteria.

If they do not meet the criteria due to changes in work, they’re not entitled to bereavement leave. However, the employee may re-qualify when they do meet the 6-month requirement.

You may agree to give employees additional bereavement leave above the minimum entitlement, depending on the circumstances. For example, if a funeral is being held a long distance away.

Employees should tell you as soon as possible when they have a bereavement, and they want to take leave.

Minimum entitlement

Each employee gets bereavement leave for a minimum of 3 days per bereavement in the following circumstances.

- The employee’s immediate family member dies (for example, parent, child, partner or spouse, grandparent, grandchild, brother, sister, parent-in-law).

- The employee has a miscarriage or stillbirth.

- Another person has a miscarriage or stillbirth and the employee:

• is the person’s partner

•    is the person’s former partner and would have been a biological parent of a child born as a result of the pregnancy

•    had agreed to be the primary carer of a child born as a result of the pregnancy (for example, through a formal adoption or a whangai arrangement)

•    is the partner of a person who had agreed to be the primary carer of a child born as a result of the pregnancy.

Each employee gets bereavement leave for a minimum of 1 day per bereavement if another person dies and you accept they’ve had a bereavement. This is based on:

- how close they were with the deceased person

- whether they have to take a lot of responsibility for all or any of the arrangements for the ceremonies relating to the death

- if they’ve any cultural responsibilities in relation to the death.

PARENTAL LEAVE

Employees are entitled to take time off work for parental leave, where they meet the necessary requirements.

If your employment agreements or workplace policies include parental leave provisions, these will only apply if they are better than, or the same as, those provided by law.

You must keep an employee’s job open for them while they’re on parental leave, unless it’s a key position in your business, or the role becomes redundant.

If an employee asks for parental leave and meets the eligibility requirements, you must support them to take the time off. Their eligibility for parental leave will depend on the type of leave they apply for and how long they have worked for you. 

If they do not meet the criteria for parental leave, you can choose to give them a period of unpaid leave.  

When an employee asks to take parental leave, talk it through with them and make sure they meet the conditions for the leave they want to take. Then put everything into writing so you both know what’s been agreed. 

You also need to keep your employee informed if there are or will be any changes that may impact their role while they are on parental leave.

There are 4 different types of parental leave: 

- Primary carer leave

- Partner's leave

- Extended leave

- Negotiated carer leave

PUBLIC HOLIDAYS

Your employees are entitled to a paid day off if a public holiday falls on a normal working day for them.

If an employee takes the public holiday as a day off, you must pay them what they would have received if they had worked that day – their ‘relevant daily pay’ – or, if this is not possible or practical, their ‘average daily pay’ – a daily average of their gross earnings over the past 52 weeks. You can also choose to use their average daily pay if their daily pay varies within the pay period when the holiday falls.

As an employer, you should also be clear on the rules around:

- paying employees for public holidays that fall at a time they are taking another form of leave

- transferring public holidays.

All employees are entitled to a maximum of 12 public holidays a year. However, an employee:

- cannot claim 2 public holidays if a public holiday is ‘Mondayised’ (one for the actual date and one for the Mondayised date) – even if both are ‘otherwise working days  ’ for them

- cannot be entitled to more than 4 public holidays over the Christmas and New Year period, regardless of their work pattern

- can claim only one Anniversary Day per year – for example, if an employee normally works in Auckland but is temporarily based in Wellington, you and the employee should agree which Anniversary Day will be observed. If you cannot reach an agreement, then the employee is entitled to observe the anniversary of the province in which they usually work.

If an employee works on a public holiday, you must:

- pay them at least time and a half for the hours they work

- give them an alternative holiday (also known as a ‘day in lieu’) if it's a day they would otherwise be working – unless they are employed only to work on public holidays.

An employee is entitled to an alternative holiday, even if only part of their shift fell on the public holiday.

Source of information

·   The Holidays Act 2003

·   Leave and Holidays  - a Guide to employees’ legal entitlements by Employment New Zealand

·   Leave and Holidays by Employment New Zealand

https://www.employment.govt.nz/leave-and-holidays/annual-holidays/managing-annual-holidays  

If you have any questions or need further information, please don't hesitate to contact Olga at olga@topflight.co.nz