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Government accepts Holidays Act Taskforce's recommendations

The Government has accepted the Holidays Act Taskforce's recommendations to improve the Holidays Act by making it clearer and providing greater certainty for employers and employees.

The recommendations will improve the current Act by providing a clear and transparent set of rules for providing entitlements to, and payments for, holidays and leave.

The Taskforce's recommended changes will address the high degree of ambiguity that has made the Holidays Act difficult to understand and implement for employers. Employees will find it easier to understand their entitlements and will also benefit from some changes to leave entitlements.

Work has now begun on the further detailed policy design. Legislation to implement the changes is expected to be introduced in early 2022 and will go through the full parliamentary process. After the legislation is enacted businesses and employers will be given plenty of time and guidance to prepare for the changes.

Read the Minister's announcement on accepting the Taskforce's recommendations.

Improvements to the Holidays Act on the way Beehive (external link)

Holidays Act Review – MBIE (external link)

Employers' obligations to remediate remain

The Labour Inspectorate continues to support employers to remediate employees for historical underpayments (such as through its practice note on estimating arrears).

Employers retain an obligation to remediate workers for historical underpayments of holiday and leave pay, and to pay employees correctly.

The Inspectorate is also continuing its programme of audits and investigations.

Labour Inspectorate addressing Holidays Act non compliance