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Annual Leave Changes 2007 - Ace Payroll

Legislation

Legislation covering the change from 3 to 4 weeks a year annual holidays is contained in Schedule 1 of the Holidays Act 2003


Frequently Asked Questions
  What is Ace Payroll doing about the changeover to 4 weeks? Is there anything I need to do now, or is it going to happen automatically?
  I have heard that I should be showing the 8% accruing for the 4 weeks now. Is this true?
  I want to account for the accrual that is happening now towards the 4 weeks annual leave. Is there a report or formula I can use?
  If someone leaves prior to 1 April 2007, do they receive the amount that had accrued towards their 4 weeks?
  What happens to people already on 4 weeks? Will Ace Payroll automatically change them to 5 weeks, or do I get a say in the matter?
  If I change my payroll to start accruing the extra week from the employees next anniversary date will this cause a problem?
  Why does an employee who reaches an anniversary before the 1st April only get 3 weeks, but an employee who reaches their anniversary just after 1st April get 4 weeks? This isn't fair.
  We have an annual closedown at Christmas and all employees are on the same anniversary date which is a requirement of the Act. I assume the 4 weeks is retrospective to Christmas 2006?

Additional Resources
What is Ace Payroll doing about the changeover to 4 weeks? Is there anything I need to do now, or is it going to happen automatically?
  • There is nothing you need to do now.

  • All changes required are automatically handled after installation of our 2007 upgrade.

  • Do not change any of your leave settings now, for example, changing your staff from 3 to 4 weeks.

  • Doing so is counter productive and makes the transition more manual and difficult.
I have heard that I should be showing the 8% accruing for the 4 weeks now. Is this true?
  • You do not need to start showing the accrual now, but it is a good idea to be aware that your leave liability increases on the 1st of April 2007 because of the changes.

  • Until 1st April 2007 Ace Payroll does not show the accrual for the extra week because should an employee leave prior to 1 April 2007, they are not entitled to the part of the extra week accrued.

  • From 1 April 2007, all current employees are entitled to 4 weeks annual leave from their first anniversary date after 1 April 2007.

  • Ace Payroll handles this automatically.
I want to account for the accrual that is happening now towards the 4 weeks annual leave. Is there a report or formula I can use?
  • If an employee leaves before 1 April 2007 there is no accrual.

  • Accordingly, any report that purported to show an accrual is wrong.

  • In terms of a formula, from 1 April 2007 every employee receives an extra weeks pay every year for doing no work. Accordingly, budget an extra 2% for wage costs.
If someone leaves prior to 1 April 2007, do they receive the amount that had accrued towards their 4 weeks?
  • No. The changes only take effect from 1st April 2007.

  • If an employee leaves before then, holiday pay calculation is unchanged.
What happens to people already on 4 weeks? Will Ace Payroll automatically change them to 5 weeks, or do I get a say in the matter?
  • This question is well answered by the Employment Relations Service. They say


  • The transition to four weeks annual holiday as a minimum entitlement does not mean that all employees who currently have four or more weeks annual holidays will qualify for extra holidays. Whether employees will receive an additional week above the new minimum requirement will depend on the specific wording of their employment agreement.

  • Agreements providing for a specified number of weeks’ annual holidays (for example, specifying four weeks annual holidays) would not provide any additional entitlement. Some agreements, however, use wording about providing one or more additional weeks’ holiday than the statutory entitlement. Such agreements have to be looked at carefully to determine whether the additional week or weeks applies on top of the new minimum entitlement. Employers who have such agreements should seek independent advice regarding interpretation.

  • Employers who provide above-minimum entitlements may choose to negotiate additional holiday arrangements with their employees.

  • See Department of Labour - Planning for the change to four weeks annual holidays for original document.
If I change my payroll to start accruing the extra week from the employees next anniversary date will this cause a problem?
  • Yes, it will cause a problem.

  • Make no changes in Ace Payroll - the 2007 upgrade makes all changes required.
Why does an employee who reaches an anniversary before the 1st April only get 3 weeks, but an employee who reaches their anniversary just after 1st April get 4 weeks? This isn't fair.
  • Because that is the law.
We have an annual closedown at Christmas and all employees are on the same anniversary date which is a requirement of the Act. I assume the 4 weeks is retrospective to Christmas 2006?
  • No, the law is not retrospective.

  • For the Christmas 2006 closedown, they get 3 weeks a year.

  • The 4 weeks a year applies from the Christmas 2007 closedown onwards.

More on processing holiday pays

  52 week history not required   Annual compulsory closedowns
  Holiday pay - daily rates   Changing holiday from 8% each pay
  Using the leave calendar   Termination 8% Part Year Payment
  Employee leave profile   Leave owing report is estimate
  Taxing of holiday pay   Holiday pay miscellaneous
  Alphabetical Index FAQ Questions FAQ Contents Back to top
More on the Holidays Act

  Annual Leave Changes 2007 - Ace Payroll   No penal payments if called back from leave
  Annual Leave Changes 2007 - Auckland Chamber of Commerce   Payments for statutory holidays
  Holiday and leave contents   Holiday pay entitlements
  Holidays Act 2003 full text   Annual compulsory closedowns
  Relevant Daily Pay - Irregular Work Pattern   Holiday pay miscellaneous
  Heinz Wattie day definition   ERS - How is holiday pay worked out?
  Employment Relations Service FAQ's   Taxing of holiday pay
  Employee can go fishing while sick   Public holiday entitlements
  No holiday pay on redundancy   Time Bank
  Annual leave accumulates until taken   How to manually change from 4 to 5 weeks
  Alphabetical Index   Case Law Back to top
More on Public Holidays

  Public Holiday Taken   Christmas New Year
  Public Holiday Worked   Labour Day
  Sick Leave On Public Holiday   Queen's Birthday
  Default Provincial Anniversary   ANZAC Day
  Public Holiday Calendar   Public holiday entitlements
  Easter Holidays   Employment Relations Service FAQ's
  Easter Sunday - Retailers and Retail Workers   Allowing alternative holidays
  Waitangi Day   Time Bank
  Alphabetical Index   Case Law Back to top
Other Leave Sections
  Holidays Act 2003   Public Holiday Worked   Annual Holiday Payments   Time Bank
  Public Holiday Entitlements   Alternative Holidays   Sick Leave   Holiday & Leave Contents
  Public Holiday Taken   Annual Holiday Entitlements   Bereavement Leave  
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Updated: 28th February 2010
Published: 11th June 2006
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