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Urgent Review of Holidays Act Required

From Business NZ - the voice of business

BusinessNZ and the NZ Payroll Practitioners' Association (NZPPA) are calling for an urgent review of the Holidays Act after a release in the media this week stated that 'when an employee takes annual leave, you should pay them the … average of the last four weeks, or the last year'.

The Accounted4 Payroll team would like to make it clear that this statement is INCORRECT.

The Holidays Act 2003 clearly states that an employee should be paid the HIGHER of their 'ANNUAL AVERAGE' or their 'ORDINARY' DAILY RATE, and if it isn't possible to work out the ORDINARY you can use the average of the last 4 weeks.

BusinessNZ and NZPPA both say the current difficulty experienced by MBIE incorrectly paying holiday pay is just one example of a number of problems caused by the Holidays Act.
Both organisations say the Act is too complex and does not fit with many work environments, and the multiple calculations required make it difficult for employers to understand and properly comply with.
BusinessNZ and the Payroll Practitioners Association are seeking urgent action by the Government to fix the Act.

If you have any immediate concerns regarding your payroll calculations, please contact the Accounted4 Payroll team by telephoning our reception (07) 827 5192

Click here to view this media release in its entirety.