Holidays and leave: Tips for employers
There are different rules for different types of leave. Understanding your obligations as an employer makes it easier to work out leave entitlements and approve leave applications — leading to happier, more productive employees. On 1 July 2020, minimum required parental leave changed from 22 to 26 weeks. Small businesses, including sole traders and contractors, can apply for these low-interest loans through Inland Revenue.
On 1 July 2020, minimum required parental leave changed from 22 to 26 weeks.
Holidays and leave at a glance
All employees working in New Zealand are legally covered by the Holidays Act (2003). The Act requires that:
- as an employer, you keep accurate records for all employees of the hours worked each day in a pay period and the pay for those hours, and leave accrued, entitled leave and leave taken
- all employees can take annual leave (depending how long they’ve worked for you)
- all employees are given sick leave and bereavement leave
- all employees get paid leave on public holidays, if they would normally work on that day.
For more information on keeping accurate records, visit Employment New Zealand’s Keeping accurate records(external link).
Annual leave
All employees are entitled to at least four weeks of paid annual holidays. This doesn’t include public holidays or sick leave.
Annual leave has more information.
Paying employees for leave
With the right systems in place, you shouldn’t have too much trouble working out what to pay your employees when they take leave. It’s important to:
- Keep all wage and time records and holiday and leave records up-to-date and accurate.
- Get your calculations right, use Employment New Zealand’s Holiday tool(external link).
- Understand what your employees are entitled to — especially those who work irregular or part-time hours.
Paying employees for leave has more information.
Public holidays
When a public holiday falls on a day your employee would usually work, they’re entitled to a paid day off, no matter how long they’ve been working for you. If they agree to work anyway, you must:
- pay them at least time and a half
- give them another paid day off later (a day in lieu).
Public holidays has more about holidays.
Sick leave
Once they’ve worked for you for six months, employees are entitled to at least five days paid sick leave each year. You must also:
- carry over unused sick leave into the next year. The maximum accumulation is 20 days — although you can provide more if you want to
- allow employees to use sick leave to care for a sick or injured spouse, partner, dependent child or any other dependent individual
- pay employees what they’d usually earn for the days they’re on sick leave.
Read more about sick leave.
Bereavement leave
Once they’ve worked for you for six months, employees are entitled to paid bereavement leave of:
- three days if their partner, parent, child, sibling, grandparent, grandchild, or their partner’s parent dies
- one day on the death of a person outside their immediate family (if you accept that your employee has suffered a bereavement).
They’re allowed to take their bereavement leave at any time and for any reason that relates to the death.
Read more about bereavement leave.
Domestic violence leave
Once they have worked for you for six months, employees affected by domestic abuse can take up to 10 days’ paid domestic violence leave.
To qualify, at least one of these situations must apply to your employee:
• They have experienced domestic violence.
• They live with a child who has experienced domestic abuse — even if the child only lives with them sometimes.
There is no time limit on when the domestic violence occurred.
Like sick leave, the domestic leave entitlement renews every 12 months. Employees cannot carry over unused days.
You do not have to pay unused days if the employee leaves.
Parental leave
Employees may be entitled to 26 weeks of government-funded parental leave payments. Employees who’ve worked for you for six months (for an average of at least 10 hours a week) are also entitled to take up to 26 weeks of unpaid parental leave.
They can take up to 12 months if they’ve worked for at least 10 hours a week for a year or more. Workers who have worked for you for less than six months may also be entitled to parental leave, in certain situations.
Parental leave has information on who can take it.
Unpaid leave
Employees can apply for unpaid leave for any reason — but it’s totally up to you whether or not to agree to it.
If you let an employee take unpaid leave of more than a week throughout the year, you’ll need to consider how it will affect their annual leave entitlements and payment calculations.
Unpaid leave has more information.
Next step
Working out what you need to pay employees when they’re taking leave can be complicated – but with the right systems and processes in place, it doesn’t have to be difficult.
