Holidays Act Changes: Keeping your finger on the pulse
The main purpose of the Bill is to increase the availability of employer-funded sick leave for employees. Qualifying employees will soon be entitled to 10 days paid sick leave in every 12-month period (entitlement year), when they are sick or injured, or when their spouse or partner or someone who depends on them for care is sick or injured. This doubles the current entitlement of 5 days paid sick leave every entitlement year.
An employee qualifies for sick leave once they have completed 6 months of current continuous employment with their employer. If the employee has not completed 6 months of continuous employment, they will still qualify for sick leave if, over a period of 6 months, they have worked for the employer for:
- At least an average of 10 hours a week; and
- Not less than 1 hour in every week during that period, or not less than 40 hours in every month during that period.
The entitlement to sick leave and how an employee qualifies for it under s33 of the Holidays Act 2003 (Act) has not changed.
The Bill introduces another change. Currently, an employee may carry over up to 15 days of unused sick leave into the following entitlement year, up to a maximum entitlement of 20 days sick leave. This will change under the Bill: instead, employees will only be able to carry over 10 days unused sick leave to the next entitlement year; but the maximum entitlement will remain at 20 days.
How will these changes affect existing employees’ sick leave entitlements?
After the Bill becomes law, it will not mean that every employee immediately becomes entitled to 10 days sick leave. Employees who already qualify for sick leave will become entitled to the increase when their next entitlement year rolls over.
For example, Jacinda started work on 1 January 2021. After working for 6 months, on 1 June 2021, she became entitled to 5 days of sick leave. Jacinda’s entitlement to sick leave for the period from 1 June 2021 to 30 May 2022 will be 5 days. It will not be until 1 June 2022, when Jacinda’s entitlement year rolls over that she will be entitled to 10 days of sick leave.
Employees who will not have qualified for sick leave before the Bill comes into force will become entitled to 10 days sick leave only after 6 months of continuous employment. For example, Michael started work in his new job on 1 May 2021. He will not become entitled to sick leave until 1 November 2021, after the Bill is to have become law. When Michael becomes entitled to sick leave, his entitlement will be 10 days under the new law.
For current employees, their entitlement to 10 days of leave will depend on when their entitlement years starts. Some employees will qualify quickly, while others will have to work up to a year before their entitlement changes.
From the date the Act comes into force, all qualifying employees will only be entitled to carry over 10 days sick leave into their next entitlement year, whenever that anniversary rolls over.
Other Holidays Act changes
This is the second amendment to the Holidays Act this year. Earlier, on 31 March 2021, the Holidays (Bereavement Leave for Miscarriage) Amendment Act 2021 expanded the types of bereavement an employee may take under s69 of the Act to parents who have suffered a miscarriage or stillbirth. Parents includes both biological parents of the child, the spouse or partner of the pregnant person, and a person who was to be the primary carer of the child (not a biological parent) and that person’s spouse or partner. The entitlement to bereavement leave on miscarriage or stillbirth is three days.
Employers will need to think about how they implement these changes. If you want to know more, please contact the Saunders Robinson Brown Employment team who are happy to assist.
The above information is of a general nature only. The information in this article does in no way constitute legal advice and all readers should contact a law firm for advice relating to your specific circumstances.
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