Business New Zealand welcomes the introduction of the Employment Leave Bill to Parliament this week, which is set to replace the Holidays Act – a source of significant confusion and costs for employers in the past.

Employment Relations Policy Manager Paul MacKay says the shift to an hours-based accrual system for both annual and sick leave is the most significant change in leave legislation since the introduction of paid holidays in the 1940s.

“BusinessNZ has been advocating for an accrual-based approach for well over a decade and it’s great to see change is finally happening. Until now it has been particularly difficult for employers where employees work variable hours, such as hospitality, manufacturing and health workers. This change significantly simplifies the system for both employers and employees.

“The Employment Leave Bill is a big step towards providing long sought clarity to the provision and payment of leave to employees.”

BusinessNZ also supports the provision for a two-year implementation window for the new law.

“This window is sensible and gives payroll providers, employers and employees time to adjust to new systems, rewrite contracts, and work through transition issues.”

MacKay says the Bill provides for a remediation to process to assist finalising issues that arise under the current law, “which is a welcome change, as many employers have faced difficulties in working out the correct approach to leave entitlement and payments”.