For many employers, the Holidays Act 2003 is a constant source of frustration, especially when it comes to calculating pay for annual leave or days in lieu. Getting these calculations wrong, or failing to meet the requirements of the Act, can result in tens of thousands of dollars’ worth of penalties for serious breaches.
The government has signaled upcoming changes to streamline and simplify compliance, hopefully coming in 2023, including:
- Annual leave payments will be calculated based on the hours in the employment agreement, or averaged over the previous 13 weeks
- Employees will be entitled to take annual leave in advance, including during their first 12 months of employment
- Eligibility for alternative holidays will be based on whether an employee worked more than half of the corresponding days over the previous four or 13 weeks (eg: if the public holiday is a Monday, the employee must work more than half of the previous four or 13 Mondays to qualify for an alternative holiday)
- ‘Casual employee’ will be defined for the first time
- Only casual employees will be eligible to be paid 8% ‘pay-as-you-go’ holiday pay, and
- Employers will be required to provide pay slips to their employees each pay period.
These proposed changes look very promising, but the current laws will still apply to the upcoming Christmas and summer holidays. Until the changes take effect, all employers must ensure they are compliant with current law.