Annual leave entitlement
An employee’s annual leave entitlement should be in their employment agreement. Ideally, every payslip will show a summary of the employees’ annual leave.
All employees are entitled to four weeks’ paid annual leave after each 12-month period of continuous employment with one employer, however many employers allow leave in advance.
For casual employees, annual leave may be paid on a pay-as-you-go basis at the rate of 8% of their earnings while employed.
Public holidays are different to annual leave. There are currently 11 public holidays in New Zealand. An employee does not have to work for their employer for a qualifying period before becoming entitled to public holidays. Working public holidays attracts different rates of pay and alternative days off.
Sick leave is for when an employee is genuinely ill or injured. It can also be used when the employee’s partner or a person who depends on them for care is sick or injured (such as their child or elderly parent).
The normal amount is 5 paid days per year, however minimum sick leave entitlements are increasing to 10 days from 24 July 2021. An employee needs to have been employed for 6 months to qualify for paid sick leave.
If an employee is injured and unable to work
ACC will generally pay compensation for lost earnings after the first week off work. This applies to all injuries – work, home and sport.
If your employee is injured in a non-work-related accident, they should take sick leave for the first week off work. If they don’t have enough sick leave, you can both agree that the employee uses their annual leave instead. If this is also exhausted, the employee should take unpaid sick leave.
After the first week, and provided ACC accepts their claim, ACC will compensate the employee for 80% of their pre-injury income. This money is normally paid directly to the employee. An employee and employer can also agree that the employee can use one sick leave day a week to top their income up to 100%.
If an employee has a work-related accident, the employer has to pay 'first-week compensation' and cannot require the employee to take that time off as sick leave.
Parental leave is available to employees in a number of situations, including when their baby is born, or if they take permanent primary responsibility for a child under six years old.
Normally, the employee will get some pay from the Inland Revenue Department (IRD) if they are off work on parental leave. The payment amount is different depending on the employee’s work circumstances, their pay rate, and the type of parental leave they are taking.
By law employees are entitled to unpaid rest and paid meal breaks and varies depending on the length of their working day (or work period). The employer must provide these breaks as a minimum entitlement.
Where rest or meal breaks would interfere with essential tasks, e.g. milking, an agreement to take the break when reasonably possible is recommended.
- See Employment New Zealand’s information on rest and meal breaks.
Answers to some common questions
What if my employee wants to take annual leave when it doesn't suit?
Annual leave can be taken at any time by mutual agreement between the employer and employee. Sometimes the timing of annual leave can be inconvenient, for example, a request for leave during calving. It’s best to sit down and try to find a solution together.
As an employer, you cannot unreasonably withhold consent to an employee's request to take annual holidays. However, the operational requirements of the farm would generally be considered reasonable grounds to withhold consent.
Can I force my employee to take annual leave?
Generally, the timing of annual leave should be by mutual agreement, but in certain circumstances, you can force an employee to take annual leave with 14 days' notice. If you’d like your employee to take their annual leave within a certain timeframe, it’s best to sit down together and agree when annual leave should be taken.
Under what circumstances can employees lose their leave entitlement?
Your employee can never lose their annual leave entitlement, they cannot forfeit it, nor does it expire. An employee’s annual leave entitlement remains in force until they either take it (as paid time off) or the leave is paid out (through cashing up annual holidays or at termination).
Work out how to calculate an employee's entitlements on resignation or termination.
How much notice should my employee give for taking annual leave?
Annual leave can be taken at any time by mutual agreement. While the amount of notice required is not specifically mentioned in the Holidays Act, it needs to be fair and reasonable. This varies depending on the workplace. Some businesses may be happy with a few days’ notice - others may require a few weeks’ notice.