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Annual Leave Changes 2007 - Ace Payroll

Legislation

Legislation covering the change from 3 to 4 weeks a year annual holidays is contained in Schedule 1 of the Holidays Act 2003

Frequently Asked Questions

image  What is Ace Payroll doing about the changeover to 4 weeks? Is there anything I need to do now, or is it going to happen automatically?

image  I have heard that I should be showing the 8% accruing for the 4 weeks now. Is this true?

image  I want to account for the accrual that is happening now towards the 4 weeks annual leave. Is there a report or formula I can use?

image  If someone leaves prior to 1 April 2007, do they receive the amount that had accrued towards their 4 weeks?

image  What happens to people already on 4 weeks? Will Ace Payroll automatically change them to 5 weeks, or do I get a say in the matter?

image  If I change my payroll to start accruing the extra week from the employees next anniversary date will this cause a problem?

image  Why does an employee who reaches an anniversary before the 1st April only get 3 weeks, but an employee who reaches their anniversary just after 1st April get 4 weeks? This isn't fair.

image  We have an annual closedown at Christmas and all employees are on the same anniversary date which is a requirement of the Act. I assume the 4 weeks is retrospective to Christmas 2006?

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What is Ace Payroll doing about the changeover to 4 weeks? Is there anything I need to do now, or is it going to happen automatically?

  • There is nothing you need to do now.
  • All changes required are automatically handled after installation of our 2007 upgrade.
  • Do not change any of your leave settings now, for example, changing your staff from 3 to 4 weeks.
  • Doing so is counter productive and makes the transition more manual and difficult.
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I have heard that I should be showing the 8% accruing for the 4 weeks now. Is this true?

  • You do not need to start showing the accrual now, but it is a good idea to be aware that your leave liability increases on the 1st of April 2007 because of the changes.
  • Until 1st April 2007 Ace Payroll does not show the accrual for the extra week because should an employee leave prior to 1 April 2007, they are not entitled to the part of the extra week accrued.
  • From 1 April 2007, all current employees are entitled to 4 weeks annual leave from their first anniversary date after 1 April 2007.
  • Ace Payroll handles this automatically.
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I want to account for the accrual that is happening now towards the 4 weeks annual leave. Is there a report or formula I can use?

  • If an employee leaves before 1 April 2007 there is no accrual.
  • Accordingly, any report that purported to show an accrual is wrong.
  • In terms of a formula, from 1 April 2007 every employee receives an extra weeks pay every year for doing no work. Accordingly, budget an extra 2% for wage costs.
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If someone leaves prior to 1 April 2007, do they receive the amount that had accrued towards their 4 weeks?

  • No. The changes only take effect from 1st April 2007.
  • If an employee leaves before then, holiday pay calculation is unchanged.
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What happens to people already on 4 weeks? Will Ace Payroll automatically change them to 5 weeks, or do I get a say in the matter?

  • This question is well answered by the Employment Relations Service. They say
  • The transition to four weeks annual holiday as a minimum entitlement does not mean that all employees who currently have four or more weeks annual holidays will qualify for extra holidays. Whether employees will receive an additional week above the new minimum requirement will depend on the specific wording of their employment agreement.
  • Agreements providing for a specified number of weeks' annual holidays (for example, specifying four weeks annual holidays) would not provide any additional entitlement. Some agreements, however, use wording about providing one or more additional weeks' holiday than the statutory entitlement. Such agreements have to be looked at carefully to determine whether the additional week or weeks applies on top of the new minimum entitlement. Employers who have such agreements should seek independent advice regarding interpretation.
  • Employers who provide above-minimum entitlements may choose to negotiate additional holiday arrangements with their employees.
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If I change my payroll to start accruing the extra week from the employees next anniversary date will this cause a problem?

  • Yes, it will cause a problem.
  • Make no changes in Ace Payroll - the 2007 upgrade makes all changes required.
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Why does an employee who reaches an anniversary before the 1st April only get 3 weeks, but an employee who reaches their anniversary just after 1st April get 4 weeks? This isn't fair.

  • Because that is the law.
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We have an annual closedown at Christmas and all employees are on the same anniversary date which is a requirement of the Act. I assume the 4 weeks is retrospective to Christmas 2006?

  • No, the law is not retrospective.
  • For the Christmas 2006 closedown, they get 3 weeks a year.
  • The 4 weeks a year applies from the Christmas 2007 closedown onwards.

More on public holidays

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Public Holiday Taken
Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more..
Public Holiday Worked
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Public Holiday Calendar
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Christmas and New Year 2016/2017
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Easter Sunday
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Easter Holidays 2016
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Waitangi Day
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Anzac Day
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Queen's Birthday
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Labour Day
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Southland Anniversary Day
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Default Provincial Anniversary Day
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Payment For Sick Leave If Taken On A Public Holiday
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Alphabetical Index
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Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
Ace Payroll Frequently Asked Questions
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More on holiday pays

Cashing Up Holiday Pay
From 1st April 2011 it is legal for an employee to cash up to one weeks annual leave each year more..
Understanding Termination Accruals
Handling of accrued holiday pay upon termination can be confusing. Ace Payroll explains the concept of accruals and demonstrates how termination pay is calculated more..
Holiday 52 Week History
It is not absolutely necessary to enter a full 52 week earnings history for correct holiday pay calculation more..
Holiday Pay - Daily Rates
An explanation of the calculation of a daily rate for an employee taking holidays after a full years service more..
Leave Calendar
Use the leave calendar to record actual dates taken for leave more..
Employee Leave Profile
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Casual Holiday Each Pay
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Taxation of Holiday Pay
This article shows how easy it is to tax holiday pay according to IRD requirements more..
Annual Compulsory Closedowns
An annual compulsory closedown is where a business traditionally closes down for a number of weeks each year, usually over Christmas more..
Changing Holiday From 8% Each Pay
The procedure for changing a casual employee over to being a permanent employee in Ace Payroll for holiday pay purposes more..
Termination Holiday 8% Part Year Payment
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Holiday Pay Miscellaneous
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Alphabetical Index
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Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
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Other leave sections

Public Holiday Entitlements
Ace Payroll receives many calls immediately after every public holiday, asking whether a particular employee is entitled to be paid for the public holiday more..
Public Holiday Taken
Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more..
Public Holiday Worked
Use this method for an employee who works at any time on a public holiday more..
Alternative Holidays
An Alternative Holiday is a day an employee is entitled to take off as paid leave, in return for having worked on a public holiday more..
Annual Holiday Entitlements
This article looks at entitlements to holidays as provided for by the Holidays Act more..
Annual Holiday Payments
This tutorial shows how to record holiday pay taken using the Annual Leave method more..
Sick Leave
Entitlements to sick leave as provided for by the Holidays Act more..
Bereavement Leave
Entitlements to bereavement leave as provided for by the Holidays Act more..
Time Bank
The time bank feature allows for the accumulation of hourly leave outside the legal requirements of the Holidays Act more..
Irregular Work Pattern
In this article we look at the calculation of Relevant Daily Pay for an employee that works irregular hours more..
Leave Owing Report
The Leave Owing report provides an estimate of holiday pay owing to all staff at a selected date more..
Holidays Act 2003
The full text of the Holidays Act 2003 more..
Alphabetical Index
The Ace Payroll alphabetical index provides links to all documentation more..
Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
Ace Payroll Frequently Asked Questions
All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more..