Workplace Relations and Safety Minister Brooke van Velden in September will release a draft of proposed changes the Government will make to the Holidays Act to further support employers and businesses.
The minister said the current legislation was making it tough on businesses and she would be seeking stakeholder input on the proposed changes.
The Act deputy leader made her announcement at the Pacific Business Trust’s offices in Penrose, Auckland, today.
“This Government will improve the Holidays Act 2003 [the Act] with the help of businesses and workers who will be affected by changes to the act,” she said.
“I know there are many who are frustrated with the Holidays Act. We need an act that businesses can implement, and that makes it easy for workers to understand their entitlements.
“To ensure the new legislation can be implemented across a variety of working arrangements, an exposure draft of the bill will be released for targeted consultation in September 2024.”
CEO of the Pacific Business Trust, Mary Los’e.
Pacific Business Trust chief executive Mary Los’e said the changes to the Holidays Act would benefit a number of the nearly 2300 small-to-medium businesses her organisation supports.
“The Holidays Act imposes a range of requirements on employers that are challenging to comply with, particularly for small businesses as many do not have sophisticated payroll systems to properly assess and account for holiday entitlements,” Los’e said.
“The fact that large employers struggle to comply shows what a big issue this is for employers. We welcome the clear process for consultation and will be submitting on behalf of our nearly 2300 Pacific businesses we represent.”
Van Velden said businesses had struggled since the previous Government decided to double sick leave entitlements for employees entitled to it.
“Workplaces that rely on part-time workers are particularly vulnerable to unexpected staffing shortages. To explore this issue further, the exposure draft set for consultation will include a proposed approach to pro-rating sick leave, to better reflect how much an employee works,” van Velden said.
“Although the previous Government spent many years working on a solution, the advice I have received from officials has led me to the conclusion that there are further opportunities to improve the simplicity and workability of the legislation. In some areas, the previous Government’s decisions would end up increasing complexity and compliance costs.
“For example, the exposure draft will now include a change in how annual leave is provided, moving from an entitlement system to an accrual system.
“While workers might not notice any change in their entitlements, from a payroll perspective this should make a huge difference. An accrual system should help avoid the complex calculations that regularly stump payroll software and should therefore reduce compliance costs for employers.
“We need the act to be workable for everyone, from the multi-national corporates to the small-town family-run restaurants.
“I believe it is important to hear from small businesses in particular, given small businesses will adopt a range of working arrangements and often do not have the same payroll infrastructure as larger organisations. My priority with these changes is to increase certainty and reduce complexity.
“This is about achieving sensible and workable legislation.”
Businesses can register their interests with the Ministry of Business, Innovation and Employment (MBIE).
Labour’s workplace relations and safety spokeswoman Camilla Belich was critical after van Velden’s comments.
And contrary to what Los’e - the Pacific Business Trust chief executive said, she claimed it would impact negatively impact on Pasifika.
“Labour had a review of the Holidays Act underway, to make it less complicated and cumbersome for business. But key to its success is not to reduce entitlements like sick leave or holiday pay.
“The proposals announced by the Minister today would reduce sick leave for part time workers because it would be pro rata.
“It is also more likely affect Māori, Pasifika and women, often mothers, disproportionately.
“Sick leave already accounts for part time work and this should not be reduced. I am calling on the government to scrap this terrible policy before it goes any further.”
