Holiday pay changes become law: All you need to know

Legislation for sweeping changes to New Zealand's employment leave system has been voted in, replacing the Holidays Act with hours-based leave that workers will begin earning from their first day on the job. The new legislation overhauls how annual leave, sick leave and public holiday entitlements are earned, taken and paid. But workers and employers will not feel the changes immediately. A 24-month implementation period will run before the new system comes into force, giving payroll providers and employers time to update their systems. Until then, all existing Holidays Act rules continue to apply. The old leave laws have long been criticised for being complex and difficult to apply, particularly for workers with variable hours, such as the tourism, hospitality and health sectors where non-traditional work patterns were common. Employers sometimes miscalculate entitlements, leading to widespread non-compliance and billions in remediation payments across both public and private sectors.