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

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 here

More information

Visit Employment New Zealand 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.

(Published on behalf of Employment New Zealand)


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