The NZ Government May at Last Tackle the Holidays Act.
Here is what they are considering. Moving to the Inzenius way
The New Zealand leave is so complex payroll systems have not been accurately interpreting the rules, requiring substantial time and effort by payroll teams to attempt to comply with them.
“Holidays Act breaches by different organisations, including New Zealand Police, Te Whatu Ora and even the Ministry of Business, Innovation and Employment – which manages the law.” David Jenkins, New Zealand Payroll Practitioners Association CEO.
It is good news that the New Zealand Holiday Act may be about to change to make it better for business.
Back in 2011 the act was reviewed, but not for annual leave “They didn’t look at those recommendations regarding ‘what can payroll actually do’ – so then we spent the time from that review right up to when the government changed to basically try to put that into a piece of legislation that payroll could use. The calculations are the problem… this Act works if I work Monday to Friday 8:00 to 5:00 and I get no other payments – just my basic wage. But as soon as you get someone that’s got variable hours, a different work pattern, it falls down.” David Jenkins, New Zealand Payroll Practitioners Association CEO.
The Inzenius payroll systems already enables the accrual and payment of leave based on the current NZ Holiday Act system or alternatively on the actual hours worked, even if they extend beyond Monday to Friday, between 8:00am and 5:00pm.
The changes being considered is the conversion from the greater of condition for leave owed to a model that is based on time worked.
Inzenius already automates the calculation and has this option that allows what category of time worked is leave accrued across. This option is based on the selection of the time worked transaction types for inclusion. #ThatsInzenius, #Payroll
Tom Kitchin, co-host of The Detail on Radio NZ, commented.
A promise to overhaul the Holidays Act, again | RNZ
Complications with the Holiday Act have caused years of pay problems for employees and businesses. The government promises to fix it.
Impossible calculations, incomprehensible entitlements – it’s widely agreed across the political spectrum that the Holidays Act is a mess.
“We are doing non-stop audits trying to help our members with the issues in the act,” New Zealand Payroll Practitioners Association chief executive David Jenkins tells The Detail.
“It takes up probably about 80 to 90 percent of our work.”
He says the Act has some good theory, such as minimum entitlements on annual leave, sick leave, bereavement leave, family violence leave and public holidays. But since it came to existence on 1 April 2004, it’s been beset with problems.
“Every one of those leave types has a whole set of rules around it,” Jenkins says. “The calculations are the problem… this Act works if I work Monday to Friday 8:00 to 5:00 and I get no other payments – just my basic wage. But as soon as you get someone that’s got variable hours, a different work pattern, it falls down.”
Jenkins talks about some of the high profile Holidays Act breaches by different organisations, including New Zealand Police, Te Whatu Ora and even the Ministry of Business, Innovation and Employment – which manages the law.
There have been several attempts to try to change it. In 2011, the National-led government changed the calculations for all leave but annual leave (which hasn’t changed since the act was introduced).
Then Labour promised an overhaul, setting up a taskforce which came up with numerous recommendations.
But Jenkins says the problem was that it didn’t fit with payroll systems.
“They didn’t look at those recommendations in regard to ‘what can payroll actually do’ – so then we spent the time from that review right up to when the government changed to basically try to put that into a piece of legislation that payroll could use.”
But he says they never got there.
The National/ACT/NZ First government wants to “simplify the law” for businesses, according to ACT’s deputy leader and Minister for Workplace Relations and Safety Brooke van Velden.
Jenkins hopes things will change, but says he’s “heard these things before from other ministers and other governments”.