'Think about how this impacts your business, now's the time,' expert says
Employers across New Zealand have been advised to start reviewing their payroll processes and systems ahead of the government's overhaul of the Holidays Act.
Sanam Ahmadzadeh Salmani, Employment Hero's Employment Counsel, said the changes to be introduced by the legislation will not be an easy adjustment.
"Think about how this impacts your business, now's the time," Ahmadzadeh Salmani said in a statement.
Her comments come after Workplace Relations and Safety Minister Brooke van Velden announced late last month the government is repealing the Holidays Act 2003 with a new Employment Leave Act.
The bill, which is currently being drafted, shifts sick and annual leave systems to hours-based accrual, among other changes.
The employment counsel advised employers to start by reviewing their payroll processes and checking if their systems can handle the more detailed data input that will be required by the legislation.
"These changes go beyond technical adjustments. Employers will need to understand who is managing their payroll and how this is being done. It's about interpreting the legislation correctly and understanding the nuances between employment law and payroll."
Holidays Act problems
Changes to the country's Holidays Act come amid criticism over its complexity, with van Velden noting that the majority of employers have become non-compliant to it at some point in the past.
One of the notable examples is Health New Zealand, which had underpaid around 90,000 current and 130,000 former employees under the Holidays Act. It is currently in the middle of repaying them.
"The current system is incredibly complicated and often overwhelming especially for small businesses that don’t have an in-house HR or payroll expert to navigate the legal minefield," Salmani said.
"Even well-meaning employers can get tripped up by the confusing formulas and inconsistent rules."
The bill is expected to be introduced to Parliament by the end of the year. A 24-month implementation period will take effect once passed to ensure a smooth transition for employers and payroll providers.
