Holidays Act Review

The Government has accepted the Holidays Act Taskforce’s recommendations to make the Holidays Act clearer and provide greater certainty for employers and employees.

The purpose of the Holidays Act Review

The Government established the Holidays Act Taskforce to suggest improvements to the Holidays Act, following a joint request from unions and employers.

The Taskforce included employer, worker and government representatives and was chaired by Gordon Anderson, a law professor at Victoria University with extensive experience in employment law.

The Taskforce was asked to make recommendations on options for a clear and transparent set of rules for providing entitlements to, and payment for, holidays and leave.

The Taskforce’s recommendations

The Taskforce made 22 recommendations which were jointly agreed to by union and business representatives. The Government has accepted the Holidays Act Taskforce’s recommendations.

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 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.

The changes will introduce more transparency and clarity:

  • There will be new clear and transparent rules and definitions for determining, calculating and paying leave entitlements so that employers can have greater confidence that they are meeting their obligations under the Act and their employees are receiving their correct entitlements.
  • The greater clarity around calculating and paying leave will support employees to better understand what their entitlements are.
  • Employers and employees will benefit from greater transparency, with payslips required for each pay period, detailing used and remaining leave entitlements and how these are calculated.

The changes will increase access to some leave entitlements:

  • From their first day of employment eligible employees will be entitled to bereavement leave and family violence leave, and will begin accruing sick leave.
  • Bereavement leave will be expanded so that employees can access three days leave for more family members, including cultural family groups and more modern family structures.
  • The parental leave override will be removed, meaning that employees returning from parental leave will be paid at their full rate for all their annual holidays.

The Holidays Act is highly complex, and affects all employees and employers across the country. We have begun further detailed policy design work to implement these changes. The Government expects to have introduced legislation by early 2022, which will go through the full parliamentary process. Businesses and employers will be given plenty of time and guidance to prepare for these changes.

Read the Minister's announcement accepting the Taskforce’s recommendations(external link)

Read the full Holidays Act Taskforce final report [PDF, 1.4 MB]

Download a fact sheet on the recommendations [PDF, 403 KB]

Highlights of the proposed changes

See a summary of the recommended changes in comparison to the current Act, below. They are discussed in more detail in the Holidays Act Taskforce report.

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.

Read more about the Labour Inspectorate addressing Holidays Act non compliance(external link)

Once the Taskforce recommendations are implemented there will be a new clearer and more transparent set of rules for determining, calculating and paying leave entitlements. MBIE will provide guidance and resources to support employers prepare for the changes and ensure that they are meeting their obligations.

Background documents

Establishing the Taskforce

(The Minister for Workplace Relations and Safety made a minor amendment to paragraph 9 of the terms of reference.)

Holidays Act Taskforce members

The Taskforce included employer, worker and government representatives and was chaired by Gordon Anderson, a law professor at Victoria University with extensive experience in employment law.

The table below outlines the individual members of the Holidays Act Taskforce and which organisation they were representing.

Name Organisation Role
Gordon Anderson (Chair) Victoria University of Wellington  
Kirk Hope BusinessNZ Business member
Paul Mackay BusinessNZ Business member
Liz Coats Bell Gully Business member
Jo Tozer MYOB Business member
Richard Wagstaff New Zealand Council of Trade Unions Union member
Paul Tolich E tū Union member
Avalon Kent (July-December 2018) New Zealand Council of Trade Unions Union member
Christin Watson (July 2018-March 2019) New Zealand Nurses Organisation Union member
John Crocker (January-October 2019) Unite Union / New Zealand Council of Trade Unions Union member
Steve Hurring (March-October 2019) Association of Salaried Medical Specialists Union member
Paul Stocks Ministry of Business, Innovation and Employment Government member
David Fowler Te Kawa Mataaho The Public Service Commission Government member
Richard Philp Inland Revenue Government member

Holidays Act: Issues paper

In August 2018, the Taskforce published an issues paper that set out its understanding of the key issues that employers, employees, and payroll providers face in trying to implement the Holidays Act 2003. The Taskforce considered feedback from stakeholders on the issues paper as it developed its final recommendations.

Interim report from Holidays Act Taskforce

In December 2018 the Taskforce provided an interim report to the Minister for Workplace Relations and Safety on progress with the review of the Holidays Act.

Accepting the Taskforce’s recommendations

Contact the review team

If you have questions about the review or the Taskforce, email Holidays.Act.Review@mbie.govt.nz

Last updated: 10 March 2021