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The Holidays Act 2003 - reduce your risk of non-compliance

(Published on behalf of Employment New Zealand)
As we start the New Year, now is an ideal time to review and ensure your payroll systems and processes are up to date and reduce your risk of non-compliance with the Holidays Act 2003 (The Act). Employment New Zealand has free resources to help you comply with the Act.

Common issues for businesses include:

Strategic issues

  • Some sectors have systemic failure to comply with the Holiday Act and this is not acceptable.
  • Some employers have an incorrect ‘set and forget’ mentality to their payroll systems.
  • Employers often assume their payroll system or accountant get it right automatically when often it does not.

Operational issues

  • Poor record keeping and processes resulting in non-compliance.
  • Agreements are not reached between employers and employees.
  • Accrual vs entitlement calculations are not being applied properly.
  • Incorrect calculations, including incorrect use of hours, gross earnings, and portions of a week.
  • Incorrect use of the ‘casual’ employee approach to entitlements.

Suggestions to help reduce your risk of non-compliance

  • Engage with your employees and educate them about their entitlements.
  • Keep accurate and compliant records.
  • Provide your employees with payslips, so they can clearly see and understand how their pay and holidays are being calculated.
  • Provide a contract variance letter to formalise any changes in your employees’ work arrangements
  • Make sure that all necessary information is provided to your payroll systems provider or accountant.
  • Regularly test your payroll system for compliance with the Act.
  • Improve your knowledge of employment legislation with our free e-modules at: employment.elearning.ac.nz/

More information

Visit employment.govt.nz to help you understand essential information on annual holidays, other leave and COVID-19 updates or download our guide: Leave and holidays A guide to employees’ minimum leave and holiday entitlements.

Source: www.employment.govt.nz


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