Isaac Davison is a NZ Herald political reporter.

Holiday pay: 'Tens of thousands' more could be affected

Tens of thousands of Kiwis may have been underpaid holiday pay
Tens of thousands of Kiwis may have been underpaid holiday pay

The full extent of a holiday pay glitch is still unravelling and thousands more workers including doctors and nurses could be affected, the Labour Party says.

The party now wants an independent inquiry, after it was revealed that more than 24,000 people in the public and private sector had been underpaid between $70 and $1800 each since 2012.

Economic Development Minister Steven Joyce said yesterday that he expected more irregularities to be found.

The problem was first identified at the Ministry of Business, Innovation and Employment (MBIE), which had paid some of its 3000 staff the wrong amount in holiday entitlements.

Labour's economic development spokesman David Clark said MBIE's payroll company AMS had another 50,000 clients, including doctors and nurses. The total value of their wages was $3.5 billion.

"It's likely that tens of thousands of New Zealand still don't know they have been underpaid," Mr Clark said.

When challenged on the scale of the problem in Parliament, Mr Joyce blamed Labour's changes to the Holidays Act in 2003, which had made payments more complicated.

Mr Clark said National had been aware of the problem for six years and had failed to fix it.

The National-led Government formed a working group of unions and businesses to resolve the issue in 2010.

Asked why the pay was still being miscalculated six years later, Workplace Relations Minister Michael Woodhouse said the working group was unable to reach a consensus on how to simplify payments.

As a result, some employers were still struggling to calculate workers' holiday pay.

Mr Woodhouse resisted calls from Labour for a law change, saying that it was difficult to do so without reducing pay entitlements.

In the meantime, workers who were worried that they had missed out on pay should contact the Labour Inspectorate, he said. The inspectorate was also carrying out proactive audits.

What is the problem?
Holiday pay can be calculated two ways. It is either based on ordinary weekly pay at the start of the holiday or on average weekly earnings over the year. Employers must pay the higher amount to staff, but have not always been doing so.

How many people are affected?
At least 24,000 people in the public and private sectors have been underpaid between $70 and $1800. MBIE and New Zealand Police are two of the departments affected. The Government expects more cases to crop up.

How do I find out if I am have been wrongly paid?
Immigration Minister Michael Woodhouse says any concerned workers should contact the Labour Inspectorate.

- NZ Herald

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