Parliament has confirmed it is progressing changes to the Holidays Act, which, if passed, will simplify the current law and introduce significant changes to leave and holiday entitlements that employers need to be aware of. The proposed legislation will be called the Employment Leave Act.

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Key Changes

• Leave accrual from day one: Sick, bereavement, and annual leave will accrue from the first day of employment, removing the need to wait for 6 or 12-month anniversaries.

• Parental and domestic violence leave: These entitlements will also start accruing from day one.

• Pro-rated leave for part-time employees: Annual and sick leave will be calculated based on the hours or days worked.

• Hourly leave options: Employees can take leave in hourly increments, for example, two hours off for a medical appointment instead of a full day.

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Implications for Employers

If passed, the legislation will provide a two-year lead-in period for employers to prepare. However, it is important for businesses to understand the changes early and review their leave policies and payroll systems to ensure compliance.

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For guidance and support, employers are encouraged to contact our employment team: Kirsten Maclean and Lucy Pankhurst.

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