There has been a lot of talk, proposals and recommendations around the Holidays Act 2003.  But for now, let’s keep it simple and focus on what you need to know, and what has passed legislation.

It has been confirmed that in July 2021, the minimum employee sick leave entitlement will increase from 5 days per year, to 10 days per year.

When does this come into effect? – From 24 July 2021

Do employees get the 10 days sick leave entitlement immediately? – No.

For existing employees – this increase will take effect on their Sick Leave Entitlement Anniversary (this date is 6 months after their start date, and then every 12 months thereafter).

For new employees – after 6 months of continual employment (on their Sick Leave Entitlement Anniversary) these employees will be entitled to 10 days sick leave per year, and annually thereafter.

The maximum amount of unused sick leave was 20 days, what is it now? – This stays the same.

The maximum of unused sick leave days, which can be carried over is 20 days on the employees Sick Leave Entitlement Anniversary.

Payroll – If you run your own payroll, your software provider should give you instructions on what you need to do – if you haven’t heard from them you might like to get in touch with them. If you outsource your payroll, your provider will have this sorted for you.

Employment Contracts – Legislation will automatically override the Sick Leave Clauses in the Employment Contracts, but it is best practice to front foot this with your team and send them out an acknowledgement letter prior to this change. Your Employment Contracts may need to be update to cover these changes also.

Further reviews of the Holiday Act 2003: As mentioned above, there have been a lot of proposals and recommendations about changes to the Act. The Government has started work to implement further changes as recommended by the Holidays Act Taskforce. Their intent is to change the date at which employees are entitled to sick leave (potentially bringing this forward to the start date of employment), as well as working on strengthening and simplifying the Holidays Act 2003.

There is currently a lack of guidance on how the Act works, poor implementation by payroll systems and lack of transparency in holiday pay calculations. Work to amend this legislation has begun, but the changes are not expected to come into effect prior to 2022.

Still have questions? 

We are more than happy to chat – reach out to the People and Culture team at Strategy Collective on 06 759 7044 or hr@strategycollective.co.nz