Coming soon… 10 days minimum sick leave for employees

The Government has introduced a Bill to increase the minimum employee sick leave from five days to ten days per year.
New Zealand Employment and HR
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The Government has made good on an election promise and has introduced a Bill to increase the minimum employee sick leave entitlement from five days, to ten days per year.

The Bill has recently passed its third reading in parliament, and this change is expected to take effect around mid-July 2021. 1

This may have employees jumping for joy, but what does it mean for employers? We respond to these immediate concerns below.

Does this change the point at which an employee's sick leave entitlement kicks in?

No. Employees will still only become entitled to sick leave after six months' current continuous employment with an employer. For casual employees, they will only be entitled to sick leave if they have worked an average of 10 hours a week, or 1 hour in every week or no less than 40 hours per month, during that six-month period.

Will employees suddenly have more sick leave?

No. Employee entitlements will not automatically double. It will depend on when an employees' employment began. Current employees will become entitled on their next entitlement anniversary, and employees who have not yet worked for their current employer for six months, will become entitled after completing six months employment (which will become their entitlement anniversary). Every employees' entitlement anniversary is different.

Does this change the maximum current entitlement of unused sick leave?

No. Employees may still only carry over up to 20 days of sick leave a year, which should mitigate some concerns from small businesses about workers with high levels of accumulated sick leave. Of course, employers can always offer a greater entitlement if they wish.

Does the recent Holidays Act review affect any of this?

Yes. The Government has recently established a Taskforce to recommend changes to the cumbersome Holidays Act. It is expected that its proposals will eventually become law, some of which relate to sick leave. For example, the Taskforce suggested that sick leave should be provided and accrued from the first day of employment, with an additional day accrued per month of employment until the entitlement is reached. It also suggested that sick leave should be taken in units of less than a day, at a minimum of a quarter of a day.

While the Taskforce's recommendations may not be implemented for some time, it is best for businesses to understand its proposals now in order to be prepared.

Will sick leave be pro-rated?

No. Despite being a popular demand by some employers, there is no indication at this stage that sick leave will be pro-rated.

We recommend that employers prepare for this impending change. Employers will need to ensure that their payroll systems and employment agreements are updated once this change takes effect.

Footnote

1 Holidays (Increasing Sick Leave) Amendment Bill

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Coming soon… 10 days minimum sick leave for employees

New Zealand Employment and HR

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