New Zealand

Labor Compliance Guide

Labor Requirements

The main legislation governing labor and employment is the Employment Relations Act 2000, Minimum Wage Act, The Holiday Act, 2003 and  Parental Leave and Employment Protection Act 1987 which combines a market model for employment with greater obligations on the parties to the employment relationship to demonstrate “good faith” behaviors.

Hours & Pay Regulations

Normal Working Hours

Every employment agreement under the Employment Relations Act 2000 must not fix the maximum number of hours beyond 40 per week, exclusive of overtime. Where the maximum number of hours (exclusive of overtime) to be worked by any worker in any week is not more than 40, the employment agreement shall fix the daily working hours so that those hours are worked on not more than 5 days of the week.

The maximum number of hours (exclusive of overtime) fixed by an employment agreement to be worked by any worker in any week may be fixed at a number greater than 40 if the parties to the agreement agree. Section 11 B, Minimum Wage Act.

 

Flexible Work Arrangement
Employees can request to change their work arrangements, place, hours, or days and employers must consider the request.

All employees can ask at any time to change:

      • hours of work (over a day, a week or year)
      • days of work
      • place of work.

Section 69AA of Employment Relations Act

 

Recording Requirements

Every employer must at all times keep a record (Wages and time record) showing, in the case of each employee employed by that employer:

        • the kind of work on which the employee is usually employed;
        • whether the employee is employed under an individual employment agreement or a collective agreement;
        • in the case of an employee employed under a collective agreement, the title and expiry date of the agreement, and the employee’s classification under it;
        • the number of hours worked each day in a pay period and the pay for those hours;
        • the wages paid to the employee each pay period and the method of calculation;
        • details of any employment relations education leave taken.

The wages and time record must be kept in written form or in a form or in a manner that allows the information in the record to be easily accessed and converted into written form. Section 130 of the Employment Relations Act.

Overtime

Overtime rates are negotiated between the employer and employee. There is no legal requirement to pay overtime at a premium rate, although employees on an hourly wage must be paid for all hours worked.

Breaks

Work period between 2 hours and 4 hours

If an employee’s work period is 2 hours or more but not more than 4 hours, the employee is entitled to one 10-minute paid rest break. An employer must, so far as is reasonable and practicable, provide the employee with the rest break in the middle of the work period.

 

Work period between 4 hours and 6 hours

If an employee’s work period is more than 4 hours but not more than 6 hours, the employee is entitled to:

      • One 10-minute paid rest break; and
      • One 30-minute meal break.

An employer must provide the employee with the rest break one-third of the way through the work period, and the meal breaks two-thirds of the way through the work period.

 

Work period between 6 hours and 8 hours

If an employee’s work period is more than 6 hours but not more than 8 hours, the employee is entitled to:

        • Two 10-minute paid rest breaks; and
        • One 30-minute meal break.

An employer must provide the employee with a rest break halfway between the start of work and the meal break; and the meal break in the middle of the work period; and a rest break halfway between the meal break and the finish of the work period.

During the work period of 8 hours, the employee is entitled to—

          • Two 10-minute paid rest breaks; and
          • One 30-minute meal break.

When Breaks Should be taken for up to 8 hours of work

An employer must provide the employee with:

            • A rest break halfway between the start of work and the meal break; and
            • The meal break in the middle of the work period; and
            • A rest break halfway between the meal break and the finish of the work period.

Subsequent Period – Work period over 8 hours

During the work period beyond 8 hours (the subsequent period), the employee is entitled to the following:

              • If the subsequent period is 2 hours or more but not more than 4 hours, to one 10-minute paid rest break
              • If the subsequent period is more than 4 hours but not more than 6 hours, to one 10-minute paid rest break; and one 30-minute meal break:
              • If the subsequent period is more than 6 hours but not more than 8 hours, to two 10-minute paid rest breaks; and one 30-minute meal break.

When Break Should be Taken in the Subsequent Period

In case of work of 8 hours or more than 8 hours (subsequent period), an employer must provide the employee with the breaks as follows:

                • If the subsequent period is 2 hours or more but not more than 4 hours, the rest break in the middle of the subsequent period;
                • If the subsequent period is more than 4 hours but not more than 6 hours: the rest break one-third of the way through the subsequent period; and the meal break two-thirds of the way through the subsequent period. 
                • If the subsequent period is more than 6 hours but not more than 8 hours; a rest break halfway between the start of the subsequent period and the meal break; and the meal break in the middle of the subsequent period; and a rest break halfway between the meal break and the finish of the subsequent period.

Compensation for Failure to Provide Break

If an employer fails to provide breaks a measure that is reasonable and designed to compensate an employee which may include (without limitation):

                  • a measure that provides the employee with time off work at an alternative time during the employee’s work period; or
                  • financial compensation; or
                  • both time off work at an alternative time and financial compensation.

Penalty 

An employer who does not comply with any of the break provisions is liable to a penalty imposed by the Labour Authority. Section 69ZC to 69ZH of Employment Relations Act,

https://www.employment.govt.nz/assets/Uploads/tools-and-resources/documents/abf4cdb0e9/rest-meal-break-table.pdf

 

Breastfeeding Break

Employers must provide appropriate facilities and breaks for women who want to breastfeed at work. This can be unpaid or paid, depending on the workplace policy.

 

The breaks are unpaid and in addition to rest and meal breaks (unless the employee and employer agree otherwise). If employers do not provide breastfeeding breaks, the Employment Relations Authority could make them comply or give them a penalty. Section 69X to 69ZB of Employment Relations Act.

Public Holidays

There are 11 public holidays available to employees in New Zealand :

  • Christmas Day
  • Boxing Day
  • New Year’s Day
  • 2nd January
  • Waitangi Day
  • Good Friday
  • Easter Monday
  • ANZAC Day
  • the birthday of the reigning Sovereign (observed on the first Monday in June)
  • Labour Day (being the fourth Monday in October)
  • the day of the anniversary of a province or the day locally observed as that day.

If 2 or more of the public holiday’s specified fall on the same day, the public holidays must be treated as 1 day.

 

When Employee required to Work on Public Holiday

Employees get a paid day off on public holidays if it’s an otherwise working day for them. If an employee chooses to work on a public holiday and it is a day employee usually work, he will:

      • Be paid at least 1.5 times for the hours worked on that public holiday, and
      • Get a full day in lieu (alternative holiday) to take later

Payment if the employee does not work on a public holiday

If an employee does not work on a public holiday and the day would otherwise be a working day for the employee, the employer must pay the employee not less than the employee’s relevant daily pay or average daily pay for that day.

 

Transferring a Public Holiday by Agreement

An employer and employee may agree in writing, that an entire public holiday will be observed on another day for the employee. The day must be an otherwise working day for the employee and not another public holiday, and the transfer cannot reduce the number of public holidays the employee gets.

 

Entitlements for working or not working on a transferred date
When the public holiday is transferred, the day it is moved to become the public holiday for the employee. If the employee:

      • does not work on the day the public holiday is transferred to, they get relevant daily pay or average daily pay for the day that the public holiday is transferred to.
      • works on the day the public holiday is transferred to (the employer and employee must both agree that the employee will work on the day), they get paid time and a half for the hours worked and get an alternative holiday just as they would have if they had worked the original public holiday.

Transfer of public holidays over Christmas and New Year
If Christmas Day, Boxing Day, New Year’s Day & 2nd January:

        • falls on a Saturday and the day would otherwise be a working day for the employee, the public holiday must be treated as falling on that day:
        • falls on a Saturday and the day would not otherwise be a working day for the employee, the public holiday must be treated as falling on the following Monday:
        • falls on a Sunday and the day would otherwise be a working day for the employee, the public holiday must be treated as falling on that day:
        • falls on a Sunday and the day would not otherwise be a working day for the employee, the public holiday must be treated as falling on the following Tuesday.

To avoid doubt, this does not entitle an employee to more than 4 public holidays for the days listed. 

 

Transfer of Waitangi Day and ANZAC Day public holidays
If Waitangi Day or ANZAC Day:

      • falls on a Saturday or a Sunday, and the day would otherwise be a working day for the employee, the public holiday must be treated as falling on that day:
      • falls on a Saturday or a Sunday, and the day would not otherwise be a working day for the employee, the public holiday must be treated as falling on the following Monday.

Employees are not entitled to more than 1 public holiday for Waitangi Day and ANZAC Day respectively.

 

Alternate Holiday

An employee is not entitled to an alternative holiday if the employee works for the employer only on public holidays.

 

Public holiday falls on a Saturday
the employee would not normally work on Saturday, then their holiday entitlement is transferred to the following Monday, or
the employee would normally work on Saturday, then they will get their holiday entitlements on Saturday (the calendar date of the public holiday). View the table of entitlements for a calendar date public holiday falling on a Saturday.

 

Public holiday falls on a Sunday

          • the employee would not normally work on Sunday, then they will get their holiday entitlements on either the following Monday (in the case of Waitangi Day and Anzac Day), or the following Tuesday (in the case of Christmas Day, New Year’s Day, Boxing Day and the day after New Year’s Day).
          • an employee would normally work on Sunday, then they will get their holiday entitlements on Sunday (the calendar date of the public holiday).

View the table of entitlements for a calendar date public holiday falling on a Sunday.

 

During annual holidays
If an employee is on annual leave when there is a public holiday, they get a paid public holiday if they would have normally worked on that day, and do not lose an annual leave day.

 

During parental leave
If an employee is on parental leave and a public holiday falls within that leave, the employer does not have to pay for the public holiday because the employee would not have normally worked on that day.

 

If the employee is getting a parental leave payment over a week when there is a public holiday, the payment amount and number of weeks they get a payment for is not affected by the public holiday.

 

If an employee is sick or bereaved
When an employee would have worked on a public holiday but is sick or bereaved, the day is treated as a paid unworked public holiday and:

      • the employee would be paid their relevant daily pay or average daily pay, but would not be entitled to time and a half or an alternative holiday
      • no sick or bereavement leave is deducted.

Shifts split across a public holiday and a normal day
Generally, a public holiday runs from midnight to midnight, so if an employee works on any part of the public holiday (and it is an otherwise working day for them) they are entitled to an alternative holiday (as well as time and a half for the time actually worked on the public holiday).

 

Working on Easter Sunday (not a public holiday)

If an employee works on Easter Sunday, they would generally be paid their ordinary rate of pay for a Sunday unless they have agreed to a different rate with their employer. Section 42-73 of Holiday Act, 2003. 

Annual Leave

After the end of each completed 12 months of continuous employment, an employee is entitled to not less than 4 weeks’ paid annual holidays.

 

An employer must allow an employee to take annual holidays within 12 months after the date on which the employee’s entitlement to the holidays arose. If an employee elects to do so, the employer must allow the employee to take at least 2 weeks of his or her annual holiday entitlement in a continuous period. When annual holidays are to be taken by the employee is to be agreed between the employer and employee.

 

Entitlement to Annual Leave

The 12 months of continuous employment includes any period during which the employee was:

      • on paid holidays; or
      • on parental leave; or
      • on volunteers leave; or
      • receiving weekly compensation under the Accident Compensation Act 2001 or instead of, payment from the employer; or
      • on unpaid sick leave or unpaid bereavement leave or unpaid family violence leave; or 
      • on unpaid leave for any other reason for a period of no more than 1 week;

An employer and employee may agree that any period of unpaid leave (other than unpaid sick & bereavement leave or unpaid leave of less than 1 week ) of more than 1 week is to be included in the employee’s 12 months of continuous employment. An employer and employee may agree on how an employee’s entitlement to 4 weeks’ annual holidays is to be met based on what genuinely constitutes a working week for the employee.

 

Calculation of annual holiday pay

Annual holidays are paid at whichever rate is the higher of:

      • the employee’s ordinary weekly pay at the beginning of the annual holiday, or
      • the employee’s average weekly earnings for the 12 months just before the end of the last pay period before the annual holiday.

Both of these calculations need to be done every time the employee takes annual holidays. 

 

An employer may regularly pay annual holiday pay with the employee’s pay if the employee is employed on a fixed-term agreement to work for less than 12 months; or works for the employer on a basis that is so intermittent or irregular that it is impracticable for the employer to provide the employee with 4 weeks’ annual holidays; and

        • the employee agrees in his or her employment agreement; and 
        • the annual holiday pay is paid as an identifiable component of the employee’s pay; and
        • the annual holiday pay is paid at a rate of not less than 8% of the employee’s gross earnings.

An employee may request that his or her employer pay out a portion of the employee’s entitlement to annual holidays.

 

Sickness, injury, bereavement, or family violence arising before scheduled annual holidays
If an employee takes annual leave, and right before the leave the employee:

          • Becomes sick or injured; or
          • Has a spouse or partner or dependant who becomes sick or injured; or
          • Suffers a bereavement; or
          • Becomes entitled to take family violence to leave.

The employer must allow the employee to take such leave which would otherwise be taken as annual leave  An employer may allow the employee to take annual holidays if sick leave, bereavement leave, or family violence leave exhausted,

 

Public holidays that fall during the annual holidays 

A public holiday that occurs during an employee’s annual holidays must be treated as a public holiday and not as part of the employee’s annual holidays. Section 16-28 & 36-40 of Holiday Act 2003.

Minimum Wage

Effective April 1, 2020, the minimum wage has increased to $18.90 per hour.

 

 

 

The minimum wage may not be up to date and subject to change. Please access the link to get the latest wage rates.

Special Leave

Parental Leave

Keeping in touch parental leave: While on parental leave employee can choose (if your employer agrees) to perform work from time to time, for example, to attend a team day or change announcement as long as:

      • employee only do a total of 64 hours or less of paid work for the employer during the parental leave payment period, and
      • This work is not within the first 28 days after the employee’s child was born.

If an employee works more than 64 hours during parental leave or does any work within the first 28 days after the birth of a child then the employee is considered to be back at work. This also means that employees won’t be able to get any more parental leave payments, and any payments received after the employee’s considered back at work are treated as an overpayment. Sections 71DA and 71DB of Parental Leave and Employment Protection Act 1987.

Special Leave

A female employee who is pregnant is entitled, before taking primary carer leave, to take a total of up to 10 days’ special leave without pay for reasons connected with her pregnancy. Section 14 of the Parental Leave and Employment Protection Act 1987.

Family Violence Leave

Employees who have been affected by domestic violence can take paid domestic violence leave if they have six months’ current continuous employment with the same employer, or they have worked for the employer for six months for an average of 10 hours per week, and at least one hour in every week or 40 hours in every month.

 

Employees affected by domestic violence have the right to take at least 10 days of paid domestic violence leave. This is separate from annual leave, sick leave, and bereavement leave. Employees can also ask for short-term flexible working arrangements for up to 2 months. Section 72A-72J of Holiday Act 2003.

Primary Carer Leave

Primary carer means a female (the biological mother) who is pregnant or has given birth to a child, the spouse or partner of the biological mother, only if the spouse or partner has succeeded to all or part of the biological mother’s entitlement to a parental leave payment; or the biological mother has transferred all or part of her entitlement to a parental leave payment to that spouse or partner.

Unpaid Primary carer leave must be taken in 1 continuous period not exceeding 26 weeks.

 

If a female employee begins her primary carer leave on a date specified, in a certificate; or on a date appointed, by her employer, the female employee shall be entitled to take at least 20 weeks of her primary carer leave after the expected date of delivery and, if necessary for that purpose, to extend the duration of her primary carer leave.

 

Primary carer leave may, at the option of the employee, begin on a date which is earlier, by not more than 6 weeks than, in the case of a child to be born to the employee, the expected date of delivery; or in any other case, the date on which the employee intends to become the primary carer in respect of the child. Section 7-13 of Parental Leave and Employment Protection Act 1987.

Sick Leave

All employees (including part-time and casual employees) are entitled to 5 days’ sick leave if:

      • they have six months’ current continuous employment with the same employer, or
      • they have worked for the employer for six months for an average of 10 hours per week, and at least one hour in every week or 40 hours in every month.

For each 12-month period after meeting the above, each employee gets at least five days’ sick leave. If in any year the employee doesn’t meet the criteria, then they don’t get any new sick leave entitlement, but can use their sick leave balance which may have carried over. An employee may re-qualify for sick leave as soon as they meet the criteria.   Sick leave entitlements are not prorated in any way. 

 

Payment for sick leave
Payment for sick leave is only made when it is a day that the employee would otherwise have worked if they were not sick. If it was not an otherwise working day (e.g if the employee was on unpaid leave or the employee fell sick on a day that they weren’t rostered to work) then the employee would not be entitled to be paid sick leave. The sick leave is paid at the employee’s relevant daily pay or average daily pay.

 

Payment for part-day sick

If an employee works for part of the day and then goes homesick, this may be counted as using a whole day of sick leave, no matter how much of the day the employee has worked before going home.

 

Unused sick leave

Any unused sick leave at the end of a 12-month period can be carried over and added to their next year’s entitlement. The maximum amount of sick leave that can be accumulated under the Holidays Act 2003 is 20 days. The employer and employee can agree that sick leave can accumulate to more than 20 days; via agreement. Section 65-68 of Holiday Act 2003.

Bereavement Leave

Bereavement leave is a special kind of paid leave that all employees who meet certain criteria can use if someone close to them dies. This can be taken at any time and for any purpose relating to death and does not have to be taken straight away or on consecutive days.

 

All employees (permanent, fixed-term, part-time and casual) can use bereavement leave if they have worked for the employer continuously for six months or they have worked for the employer for six months for an average of 10 hours per week, and at least one hour in every week or 40 hours in every month.

 

Each employee gets bereavement leave for a minimum of:

      • 3 days per death if a spouse or partner, parent, child, sibling, grandparent, grandchild, or spouse, or partner’s parent dies.
      • 1 day per death if another person dies and their employer accepts they’ve had a bereavement.

Employees are entitled to bereavement leave every 12 months as long as they meet the above criteria. If an employee hasn’t met the six-month criteria so doesn’t qualify for bereavement leave, or wants to take extra bereavement leave (eg wants to take 5 days for the death of their grandparent) then their employer can agree that the employee can take bereavement leave in advance, or they leave as annual holidays.  Section 69-72 of Holiday Act 2003.

Partner Leave

If a spouse or partner and employee meet the:

      • six-month time criteria for employment, they may take 1 week’s unpaid partner’s leave
      • twelve-month time criteria for employment they may take 2 weeks’ unpaid partner’s leave.

An employee can take partner’s leave within the timeframe starting 21 days before the due date of the baby, or the date the partner or spouse becomes the primary carer for a child under six years and ending 21 days after the baby is born (unless the baby is discharged from a hospital more than 21 days after the birth, in which case the partner’s leave time frame ends on the day the child is discharged) or the date the partner or spouse becomes the primary carer for the child. Section 17-22 of Parental Leave and Employment Protection Act 1987.

Extended Parental Leave

The amount of extended leave that an employee may take depends on whether each parent meets either the six month or 12-month time criteria for employment. Extended leave may be shared by two parents who both meet the criteria, and they can take it at the same time or one after the other:

      • Employees who meet the 12-month criteria may take up to unpaid 52 weeks extended leave (less the number of weeks primary carer leave taken, up to 26 weeks unpaid leave). If two parents are sharing the leave and they both meet the 12-month criteria then they share this amount.
      • Employees who meet the six-month criteria may take up to 26 weeks in total. If two parents are sharing the leave and they both meet the six-month criteria then they share this amount.
      • If one parent meets the 12-month criteria and the other parent meets the six-month criteria then the person who has only worked for six months cannot take more than 26 weeks of the total 52 weeks (less the number of weeks primary carer leave taken up to 26 weeks) available to the couple.

The one or two weeks of partner’s leave is not included in the 26 weeks or 52 weeks extended leave period.

 

Starting Extended Leave
An employee can start extended leave:

        • at any time after employee ends primary carer leave, or
        • at any time after employee end  partner’s leave, or
        • on any date agreed with the employer, or
        • if an employee can take primary carer or partner’s leave but choose not to, then the employee can start extended leave either when the baby arrives if the child is born to employee or employee’s spouse or partner, or the date employee or employee’s spouse or partner becomes the primary carer in respect of the child in all other cases.

Employees can finish the primary carer or partner’s leave, go back to work, and then take extended leave later. Section 23-30 of Parental Leave and Employment Protection Act 1987.

Negotiated Carer Leave

Negotiated carer leave lets employees who don’t qualify for primary carer leave to take leave to care for their child and receive parental leave payments.

 

Negotiated carer leave is a period of unpaid leave from work which an employee can ask for at least three months before the baby’s due date, if the employee or their spouse or partner is pregnant, or 14 days before an employee becomes the primary carer of a child. The employer must provide the employee with a written explanation for the reason/s why they say no. Section 30A-30D of Parental Leave and Employment Protection Act 1987.

Volunteer Defence Forces Leave

An employer has to let employees take leave while they do Armed Forces’ full-time or part-time voluntary training or service (unpaid) and/or active operational service, if they are called up or volunteer in a ‘Situation of National Interest’, war or emergency.

Employers must hold an employee’s job open and protect their entitlements but don’t have to pay employees for any period while on leave.     

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/defence-force-volunteers/

Stress Leave

An employer may provide an employee with sick leave if they have work-related stress.

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/stress-leave/

Garden Leave

Garden Leave is not referred to in employment legislation but is a term sometimes used to describe a period when an employee retains their employment, receives full pay but does not report to work. Garden leave can be useful when both the employee and employer agree to its use in a particular situation. 

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/garden-leave/

Unpaid Leave

An employee can take leave without pay if their employer agrees. The agreement should be recorded in writing. 

 

Employees aren’t entitled to take leave without pay; they can only take it if their employer agrees. This agreement could be contained in their employment agreement, or could be negotiated by the employee and employer at the time leave is taken.

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/leave-without-pay/

Voting Leave

Leave to vote in general elections or by-elections. The number of times employees can have off to vote depends on whether you’re required for essential work or services.

 

If employees don’t have to work after 3 pm on the polling day for essential work or services, employers must allow employees to leave work by 3 pm for the rest of the day without deductions from employee’s pay for this time off work. 

 

If an employee is required to work for essential work or services after 3 pm on the polling day employer must allow the employee to leave work for a reasonable time to vote. Employers can’t make deductions from employee pay for time up to 2 hours that employees spend off work.

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/election-voting-leave/

Employment During Disaster

During and after a disaster or emergency, employers and employees need to consider issues such as health and safety, emotional wellbeing, and payment options. 

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/employment-during-and-after-disasters/

Long Service Leave

Long service leave and other long service benefits are not legal requirements but may be negotiated between an employer and employee as additional entitlements under their employment agreement. How long an employee has to work to qualify for long service leave will depend on what is agreed between the employee and employer.

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/long-service-leave/

Jury Duty Leave

Jury service is administered by the Ministry of Justice. If an employee has been summoned for jury service they can get more information about this from the Ministry of Justice. Employees who have been called up for jury service must attend and their job is protected while they attend jury service. Employers must allow an employee to attend jury service.

 

https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/jury-service/

Last updated on: August 31st, 2020