A number of joint industry government Payroll Sector Leadership workstreams were established during 2016 to consider how to improve compliance with the Act. This includes a leadership and governance group, and four workgroups.
News and updates
- Position Statement – Estimating the Value of Holidays Act 2003 Underpayments [PDF 370KB]
- Position Statement – Accounting for Overpayments through Holidays Act Re-calculations [PDF 168KB]
- Holidays Act 2003 remediation calculations checklist [PDF 192KB]
- FAQs for employers completing Holidays Act remediation calculations [PDF 581KB]
The Labour Inspectorate’s approach to supporting compliance also involves:
- proactive and reactive audits and investigations of employers
- education and information including guidance on how to check that an employer's payroll system complies.
Audits and investigations
The Labour Inspectorate has defined a “payroll audit” using the following criteria:
- the payroll audit tests if an employer has been calculating employee annual leave entitlements and payments for BAPS leave (bereavement leave, alternative holiday, public holidays and sick leave) in a manner that is compliant with the Holidays Act 2003
- the organisation has/had at least 20 employees, and
- the payroll system is/was electronic.
Payroll Audit update as at 30 June 2020
Jul 2012 – Jun 2020
|Cases categorised as “Payroll audit”||241
incl 101 proactive
incl 89 proactive
Of the completed audits
Jul 2012 – Jun 2020
|Cases where one or more compliance tool applied
NB. It is possible for multiple tools to be used in respect of one case
|Referral to the Employment Relations Authority||5|
|Record of Settlement||2|
As shown above, one or more compliance tool(s) has been applied in respect of 187 of the 201 completed payroll audit cases. The remaining cases are still under consideration by the Labour Inspectorate.
A number of employers identified they had Holidays Act non-compliance prior to the Labour Inspectorate making contact. These employers signed an Enforceable Undertaking without an audit report being produced.
Payroll Audits commenced and completed
Holidays Act non-compliance remediation payments update as at June 2020
Jul 2012–Jun 2020
|Number of employers who have paid arrears (average gross payment per affected employee)||112|
|Amount of arrears paid||$237.7m|
|Number of employees paid arrears||227.3k|
|Range of average gross payment per affected employee per employer||$29 - $16.2k|
Figures reported above now include NZ Police data.
* Due to the nature of employment relationships some employees may have been counted multiple times.
Gross payout by number of affected employees
Tools and Resources
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Position Statement - Accounting for Overpayments through Holidays Act Re-calculations - PDF 168KB
Covers historical re-calculation of leave entitlements, including how overpayments can be considered when performing Holidays Act 2003 remediation.
Position Statement - Estimating the Value of Holidays Act 2003 Underpayments - PDF 370KB
It appears that some employers in NZ have not been paying minimum holiday entitlements.
Remediation calculations checklist - PDF 192KB
A guide for employers when providing evidence to a Labour Inspector.
Employers completing Holidays Act 2003 remediation calculations - PDF 581KB
Answers to frequently asked questions.