Employment Leave Bill - Employer Update
This Bill is currently before Select Committee. When it passes, sometime before the election on 7 November 2026, it will replace the Holidays Act 2003. It will mean a lot of change for employers.
Employers - don’t panic!
When the changes are confirmed, there will be a 24 month implementation period as we will all need to get payroll and HR ready for the changes.
Key proposed changes
We have summarised the points that will likely have the most impact on employers. Remember they are proposed and could change. We will let you know when the Bill is finalised.
Annual holidays calculated in hours, not days or weeks.
Annual and sick leave accrue from day one.
Sick leave accrues proportional to hours worked.
Holiday pay simplified to one calculation (base wage).
Mandatory payslip details (leave and pay)
‘Otherwise working day’ has clearer definition for varied work patterns.
Casual workers and extra hours (overtime) paid 12.5% leave compensation payment.
Working on a public holiday accrues alternative holiday by the hour at T1.5 for hours worked. The current entitled to an alternative day is removed.
Employees can request to cash up 25% of their annual holiday balance each year (at employer discretion.
Employees returning from parental (and volunteer) leave are paid holiday pay at their normal rate.
Paid bereavement and family violence leave is available from day one.
What to do now
Don’t panic!
If you currently have payroll issues, get them sorted.
Stay informed as details are confirmed.
Follow guidance from your payroll provider.
Prepare for updates to employment agreements, policies, and budgets.
Need a hand?
There is no need to work through these changes alone.
The RYHR team are here to help you with:
Sorting out current payroll issues.
Getting your payroll system ready.
Getting the changes clear in your head and what they mean for your organisation.
Creating a to do list.
Any other related questions!