Glossary of leave terms for payroll remediation

Definitions of leave types and leave payment rates under the Holidays Act 2003 that relate to the payroll remediation.

Leave types

Annual Holidays

Annual Holidays are to provide employees with paid time off work for rest and recreation.

Bereavement Leave

Bereavement leave is paid leave that all employees who meet certain criteria can use if someone close to them dies.

Alternative Holidays

An employee gets an alternative holiday for working on a public holiday that is an otherwise working day.

Public Holidays

There are 11 public holidays provided under the Holidays Act 2003 and are in addition to annual holidays. An employee is entitled to a public holiday if the holiday falls on a day that the employee would otherwise have worked.

Sick Leave

Sick leave is paid time off work if an employee, their spouse, partner, dependent child or other person who depends on them is sick or injured.

Leave Payment Rates

Ordinary Weekly Pay (OWP)

Ordinary weekly pay is used in the calculation of payment for annual holidays and is the amount an employee is normally paid each week.

Ordinary Weekly Pay – 4 week

Where it is not possible to calculate ordinary weekly pay due to the variability of pay each week, a formula using the previous four weeks gross earnings should be used.

Average Weekly Earnings (AWE)

Average weekly earnings are worked out by calculating the employee’s gross earnings over the 12 months before the end of the last pay period before the annual holiday is taken, and dividing that figure by 52.

Relevant Daily Pay (RDP)

Public holiday, bereavement and sick leave and alternative holiday payments are calculated using relevant daily pay or average daily pay. Relevant daily pay is what an employee would have earned if they were at work on the day.

Average Daily Pay (ADP)

If it is not possible or practicable to work out relevant daily pay or an employee’s daily pay varies in the pay period in question, average daily pay may be used. Average daily pay is the daily average of the employee’s gross earnings over the past 52 weeks.

Other

Minimum entitlements

Employees’ minimum legal entitlements under the Holidays Act 2003.

Enforceable undertaking

An enforceable undertaking is a voluntary commitment by an employer to address certain defined breaches of employment legislation.