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All you need to Know about Annual leave In new zealand

By Will Elton, Last updated: 2021-05-28 (originally published on 2018-11-13)

You employee have annual leave entitlement for four weeks’ after 12 months (a year) of continuous employment. As an employee you are entitled to different types of leave annually.

In case, if an employee has been working less than 12 months then it’s on employer to decide whether to let employees take some of their annual holidays in advance.

Some important points regarding annual leave for employees:

  1. Employee can have at least 4 weeks’ paid annual leave a year.
  2. Employee and employer has to agree with about when employee want to take leave.
  3. Payment regarding should be included in employment contract.
  4. Employee can ask to swap up to 1 week of your annual leave for cash each year.
  5. One can take unpaid leave if employer agree on it. (in case you complete your paid leave).

Employees right to take annual Leave in New Zealand.

Annual leave can be taken as per agreement between employee and employer. Employee have authority to take at least two of the four weeks’ annual holidays continuously.

You have the right to:

  • To take at least 2 weeks long leave
  • take leave whenever you want,as per agreement with employer
  • carry over leave into the next year — though your employer can make you take leave in some circumstances.

Your employer can:

  • tell you when you have to take time off, as long as they give you at least 2 weeks’ notice
  • restrict  you to take leave in some cases like at busy periods.

If you don’t take all annual leave with in 12 months, then it’s added to your next year’s leave.

Incase employees are in first year of working and don’t have any leave employer must pay you 8% of the gross pay earned since started working for employer.

You can take leave in closedown in 2 ways, but they need your employer’s agreement.

  1. You can take annual leave in advance.
  2. Your employer can change the date you receive your annual leave allowance so you have some paid leave to tide you over the closedown. If they do this, then the date they choose must be near to the start of the annual closedown and it becomes your leave anniversary from then on.

Payment regarding your Standard annual leave.

Basically employment agreement should state about when employee get paid for time off and how your pay is worked out.

How much Employee Will get paid for annual leave In new Zealand?

While you’re on annual leave in New Zealand, you’re paid at the rate of at least the greater amount of:

  • ordinary weekly pay (OWP) as at the beginning of the annual holiday, or
  • the employee’s average weekly earnings (AWE) for the a months immediately before the end of the last pay period before the annual holiday.

For example

You work part time. Your regular days of work are Tuesday and Wednesday, but you often pick up weekend shifts when they’re available.

If you take a week off, you’ll be paid the average amount you’ve earned a week over the last 12 months — because that amount will be more than what you’d get for your regular hours on Tuesdays and Wednesdays.

 Ordinary Weekly Pay vs Average Weekly Earnings

If you take leave in advance your payment then depends on 2 cases :

Case 1: ​If you’ve been in the job for less than 12 months

You get paid whichever is greater:

  • your ordinary weekly pay (at the beginning of the annual holiday), or
  • your average weekly earnings since starting the job.

Case 2: If you’ve been on parental leave in the last 12 months

Your payments for annual leave are affected in the 12 months after you return to work.

They’re also affected if your work anniversary happens:

  • when you’re on parental leave
  • when you’re in a period of preference — a 26-week period where if your employer offers a job that is very similar to yours, they must offer it to you first.

You must be clear about annual leave payment before you sign your employment contract.

You can convert annual leave to cash In New Zealand.

If the employee have served for 12 months then employee can swap annual leave for cash.

An employer can’t:

  • pressure their employee into cashing up holidays
  • raise it in wage or salary negotiations
  • make cash up a condition of employment
  • put a cash up request into an employment agreement, but can include the process for making a request.

What should you know about taking unpaid leave?

If your employer has an annual closedown and you don’t have enough leave, you may have to take unpaid leave. 

If you take more than a week of unpaid leave over the year, you can agree with your employer if:

  • the unpaid leave will have any effect on when you get your annual leave or how much you get paid for it, or
  • that you’ll move the date of your anniversary out by the amount of unpaid leave you took, so you get your annual leave entitlement later each year from then on.

Pay-as you-go in annual leave in NZ

Every employee has the right to four weeks’ annual holidays per year applies to all types of employees. But in some cases  some employees may be paid their annual holiday entitlement on a pay-as-you-go basis.

This case arise in following cases

  • the employee is employed on a genuine fixed-term agreement of less than 12 months, or
  • the employee works so intermittently or irregularly that it is impractical for the employer to provide them with 4 weeks’ annual holidays.

In both of these situations:

  • the employee must agree to it in their employment agreement and
  • the 8% gross earnings must be shown as an identifiable component of the employee’s pay.

8% instead of annual holidays

Annual Close down in annual leave

If the employer regularly  closedowns or business has an annual closedown, employees may have to take their annual holidays entitlement.

annual closedown can occur:

  • across an entire workplace, or
  • for part of an organisation (eg where a factory closes for maintenance while the office, dispatch and sales departments stay open).

Pdf about Closedowns.

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