Holidays Act

Our love/hate relationship with the Holidays Act

October 6, 2014
Sam | FlexiTime Resource Author


Payroll expert at FlexiTime

At FlexiTime we have a love/hate relationship with the Holidays Act.

New Zealand has one of the world’s most complex legislative structures around employee leave. For a payroll software company, that’s not entirely a bad thing. Complexity means that it’s nigh impossible to handle the leave for more than a couple of employees without using some software.

On the other hand, probably 80% of our support call time is spent on questions about leave. And for new customers transferring from another system, leave calculations are the biggest sticking point. 12 month rolling averages, 8% versus 4 weeks, relevant daily pay, average rates versus ordinary rates versus standard pay rates, otherwise working days… It’s a minefield. Just look at the FlexiTime Leave History report so see all the values that need to be maintained in order to track leave.


For a country renowned as easy to do business within and that often has the simplest taxation and compliance systems (such as GST), the Holidays Act is a glaring example of less than ideal legislation.

Over the next few weeks I’ll be putting together a few blog entries outlining some of the issues the current legislation, some actions and reactions from other organisations to the Holidays Act, and some ideas on how to clean up this mess.

But for now, I’m just outlining the noble principles behind the Holidays Act.

New Zealand law on holidays and leave has been based on:

  • For the purposes of rest and recreation, all employees are entitled to enjoy four weeks’ paid annual holidays (or “annual leave”) each year.

  • Public holidays are for the observance of days of national, religious, or cultural significance, which all employees should be entitled to take as leave, where possible. Where it is necessary for an employee to work on a public holiday that work should be specially rewarded.

  • The employment relationship is both financial and human. Therefore, after a period of employment, it is reasonable to expect that employers will support employees with sick leave and bereavement leave when required.

This extract directly from the Department of Labour makes it sound so simple.

Unfortunately it’s not.

Sam | FlexiTime Resource Author


Payroll expert at FlexiTime

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