Leave & Holidays – What Else Is In The Pipeline?

The Government accepted
the 22 Holidays Act Taskforce recommendations to make the Holidays Act ‘clearer and more certain’. Work is now underway to draft changes to legislation with a target of early 2022 for implementation. The changes are expected to include increases in some entitlements and more transparency and clarity.


Increases to current entitlements are expected to include:


  • Accrual of sick leave entitlement from commencement of employment. The current suggestion is an accrual of 1 day per month. 
  • Removal of the 6-month service requirement for bereavement and family violence leave so that eligibility is from the commencement of employment
  • Expansion of the 3 days paid bereavement leave to include more family members, cultural family groups and modern family structures
  • Removal of the annual holiday override in the Parental Leave and Employment Protection Act that allowed for specified annual holiday entitlements to only be paid at average earnings not the ‘higher of’.


What will not be changing


  • Annual Holiday entitlement will still be in weeks, all other entitlements like sick leave, public holidays will be in days.
  • Payments will be based on weekly or daily calculations depending on the type of leave.


Other Proposed Changes


Gross Earnings

  • To expand the definition for holiday and leave calculations to include all cash payments including those that are discretionary payments. The only amounts to be excluded would then be expenses reimbursements for actual costs incurred by an employee.


Annual Holidays

  • To include an ‘average hours’ option for determining the amount of a 4-week entitlement where the hours of work cannot be determined from the employment agreement or roster.
  • To allow for annual holidays to be taken in advance of an entitlement on a pro-rata basis removing an employer’s discretion to agree to this.
  • For payment calculations to also include average weekly pay from the last 13 weeks when determining what is the ‘higher of’ with the caveat that some commission/incentive payments would only be included in the 52-week calculation.
  • To remove the ability to pay annual holidays at 8% pay as you go for fixed-term employees .
  • To have a clearer definition of what “intermittent and irregular” means for employees who can be paid on a ‘pay as you go’ basis.
  • To require a review of ‘pay as you go’ employees every 13 weeks to ensure they still meet the definition that allows annual holidays to be paid on that pay as you go basis.
  • To remove the provision for 8% holiday pay to be paid at closedown and the annual leave anniversary date to be reset.
  • To give employees a choice about whether entitlements are paid or transferred on the sale of a business.


Other Leave – Family Violence, Bereavement, Alternate Days, Public Holidays, Sick Leave


  • To change the calculation from relevant or average daily pay to be the greater of ordinary leave pay or an average of last 13 weeks.
  • To allow for leave to be taken in minimum ¼ day units.
  • To include a detailed formula for determining an ‘otherwise working day’.
  • To amend provisions relating to the transfer of public holidays to minimize the risk of disadvantage.


A more detailed summary is available from the Ministry of Business, Innovation and Employment here


If you have any questions about these new regulations and how they may impact your business please feel free to contact a member of the Grow HR team on (06) 878 5454 or email team@growhr.co.nz