Managing sick leave

Eligible employees are entitled to 10 days of paid sick leave each year to care for themselves, their partners and children, or other dependants.

What an employee is entitled to

All employees (including part-time and employees) are entitled to 10 days of sick leave each year once:

  • they have been working for you continuously for 6 months, or
  • they have worked for you for a period of 6 months for:
    • an average of 10 hours per week, and
    • at least 1 hour in every week or 40 hours in every month.

If, in any year, an employee does not meet the criteria:

  • they do not get any new sick leave entitlement
  • they can still use any sick leave balance carried over from the previous year.

Your employees should let you know as soon as possible when they need to take a sick day. 

Work out if an employee qualifies for sick leave [PDF, 600 KB]

Carrying over unused sick leave

If an employee has unused sick leave at the end of a 12-month period, it is added to the next year's entitlement – to a maximum of 20 days of sick leave.

You and your employee can agree that sick leave accumulates to more than 20 days – either in their or through your workplace policies.

Creating workplace policies and procedures

Unused sick leave does not have to be cashed up and an employee is not entitled to have any unused sick leave paid out as part of any final payment to the employee when they leave.

Employees taking sick leave for appointments

You are not legally required to give employees time off work to visit the doctor or dentist for routine appointments unless their employment agreement says otherwise.

Collective and individual agreements

If there is nothing specified in the employment agreement, you and your employee can negotiate. If you cannot agree, the employee can schedule these appointments for a time outside of work hours.

If the employee is sick or injured, they could use sick leave to attend the appointment.

Taking part-days sick

The Holidays Act 2003 describes sick leave entitlement in days and does not divide it into part days or hours. This means that if an employee works for part of the day and then goes home sick, it can be counted as using a whole day of sick leave – no matter how much of the day they worked before going home.

However, you can agree with your employee to describe their entitlement as hours or part-days, if you want to.

For example, if an employee worked a half-day, and then went home sick, you could agree to only deduct a half-day of sick leave. You would then pay them half their or for the time on sick leave.

Holidays Act 2003 - New Zealand Legislation(external link)

If an employee has no sick leave left

If an employee has no sick leave left, you could agree with them that they:

  • use sick leave in advance
  • use some of their
  • take unpaid leave
  • take paid special leave, either as provided for in the employment agreement or workplace policies or by agreement between you and the employee.

James normally works 8 hours Tuesday to Friday and 4 hours on Saturday. If he is sick on Saturday, the employer should pay James his relevant daily pay for the sick day, which is 4 hours.

If relevant daily pay is used for the calculation, the payment must include regular overtime if the employee would have worked overtime on the day if they had not been sick.

Working overtime or extra shifts

Claire’s employment agreement specifies an hour for lunch. But Claire usually takes only half an hour for lunch, at her employer’s request. Instead, she gets an extra half hour payment each day. If Claire is sick, her sick leave payment includes the extra half-hour she is normally paid, even though it is not in her employment agreement.

If an employee works continuously but has an irregular pattern, sick leave is payable if they were rostered to work on the day leave is taken, or they could have expected to be rostered. The sick leave is paid at the employee’s relevant daily pay or average daily pay.

Payment for sick leave is made in the normal pay cycle.

Record keeping

Requesting proof of illness or injury

You can ask an employee for proof of sickness or injury – usually a medical certificate from a doctor saying that the employee (or their spouse, partner or dependant) is sick or injured and unable to work. You cannot tell an employee which doctor or practice they should go to.

If you ask an employee for proof that they are sick or injured – or unable to attend work because their spouse, partner or dependant is sick or injured – and they have been away for:

  • less than 3 days, you must ask for the proof as soon as possible, and pay the employee back for any costs – for example, the cost of their GP visit
  • 3 or more days in a row, even if they are not all days the employee would have otherwise worked, then the employee must cover the cost.

If you have good reason to believe an employee is either unwell or injured, and should not be working, you can ask that they have a medical examination. You cannot force them to do so, but you can suspend them if they refuse, in certain circumstances.

Jennifer works on Monday, takes a day's sick leave on Tuesday, has a one-day scheduled break on Wednesday (during which she is still sick), and takes another day’s sick leave on Thursday. Her employer can ask for proof at Jennifer’s expense as she has been sick for 3 days in a row.

Holly works Monday to Friday, is sick on Monday and Tuesday, and on Wednesday she phones her employer to tell them that she will be off sick again. Holly’s employer tells her that:

  • she will need to bring a medical certificate to work on her return to prove that she was genuinely ill
  • she will need to pay for the costs of getting the medical certificate herself, as she will have been sick for 3 days.

If Holly’s employer had asked for the certificate when she phoned in sick on Tuesday, her employer would have had to cover the cost. Holly’s workplace policies state that sick leave is recorded and deducted in half days. If Holly had come to work at lunchtime on Wednesday (and taken only a half-day’s sick leave) as she was feeling much better, she would have been sick for less than 3 days, and her employer would have had to cover the cost of the medical certificate.

Paying employees for sick leave

You must pay an employee for sick leave:

  • in the payment that relates to the period in which the leave is taken at the rate of their relevant daily pay, except where it is not possible or practical to calculate the or the employee’s daily pay varies within the pay period the sick leave falls in which case you can use average daily pay.

Employees only get paid sick leave for days that they would have worked had they not been sick, known as an  If an employee is sick on a day that is not an ‘otherwise working day’, they are not entitled to paid sick leave – for example, if they were already on unpaid leave or fell sick on a day they weren't rostered to work.

If you have asked for proof of sickness or injury, but the employee has not provided this and does not have a reasonable excuse for not providing it, you do not have to pay them for the sick leave until they do so.

Pay for sick, bereavement and family violence leave

When an employee is on ACC

If an employee has an accident or injury covered by the Accident Compensation Corporation (ACC) scheme, your responsibilities depend on whether it was a workplace accident or not.

What to do when an employee is injured – ACC(external link)

If an employee is receiving weekly ACC compensation, you:

  • cannot ask them to take time off in the form of sick leave or
  • do not have to pay the employee.

If the period of leave on ACC is more than 5 days, you and your employee can agree that their ACC payment is topped up from 80 to 100 per cent by using one day of sick leave for every 5 days’ leave taken.

Weekly compensation - ACC(external link)

If it was not a work-related accident

When an employee is taking leave for the first week of a non-work accident, they can use sick leave or annual holidays if they have any.

If it was a work-related accident

If an employee has a work-related accident, you:

  • must pay ‘first week compensation’ equivalent to 80% of the employee’s usual earnings
  • cannot make the employee take this time as sick leave or as annual holidays – but you can agree with them that you will top up their pay for that week from 80 to 100% by using one day of the employee’s sick leave for every 5 days’ leave taken.

When an employee leaves after being on ACC

When an employee leaves their job after being on ACC compensation, this can affect their final holiday pay, which is based on their gross income.

The ‘first week compensation’ payable by you is included in their gross earnings. ACC compensation payments, however, are not earnings, so are not included.

Since annual holidays are calculated at the higher rate of an employee’s average weekly earnings for the 12 months before termination, and their ordinary weekly pay, if the employee has been unpaid for over a year, the average weekly pay will equal zero. You must therefore use the ordinary weekly pay, which is the amount the employee would receive for an ordinary working week.

Many employees will still have an ordinary weekly pay – normally specified in the employment agreement – even after being off work on ACC for a lengthy period. If not, the pattern of work and payment from when the employee was last working will determine what an ordinary weekly pay should be for them. For example, an employee who worked 40 hours a week at an hourly rate of $30 per hour would have an ordinary weekly pay of $1200, despite being off work on ACC for over a year.

If it is genuinely not possible to determine an employee’s ordinary weekly pay (for example, due to variable and unpredictable hours of work), the 4-week average formula should be applied to calculate their ordinary weekly pay. Because this formula involves an average of the earnings in the four weeks before termination, for an employee who is off work for more than 4 weeks, this would equal zero. For these employees, although they will have an entitlement to their unused annual holidays, it will have no monetary value.

Annual holiday pay

Final pay

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