Annual leave anniversary date question.

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#1241587 18-Feb-2015 13:09

4possm:
jonathan18:
afe66: Can't see why they can't pay out more than a week if correct. Maybe to stop employers not giving leave just more cash..

In my case, I didn't really want the leave forced on me, partner working so either I go on holiday by myself or stay at home getting bored after couple of weeks.

They offered the cash and I accepted it.

Previous job similar thing happened. Good thing for bank balance, probably not for work life balance.

A.

The reality is a good employer shouldn't let a leave balance reach anything like these proportions - not just for their own bottom line (the liability of such pay-outs) but also it's their responsibilty to ensure they find someone else to do the job in your absence, and it's clearly poor future planning if they don't have a suitable backup plan in place should you leave or be sick/injured (or fill in when on leave).

My other concern, as someone highly supportive of worker's rights, is that that it's really poor practice by the company to not ensure their employees take (regular) leave from their job, which is important for so many reasons (health, stress, family relationships...). Wow, the practices that firms get away with in the private sector...
The company I work for now, we have a staff member that had so much accrued A/L that we had to force him to take off 1 day every week to run it down because he didn't want to take holidays.
He now has every Wednesday off for the next 2 years.

Ha - that is excellent!

I used to borrow from next year usually so was almost always in arrears. I always wondered what it would be like to use it to have 1 day off a week instead. I never managed to not go on holiday enough to make it work though.

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Geektastic

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#1241591 18-Feb-2015 13:12

Handle9:
Geektastic: My curiosity related to describing it as pay rather than days off.

Surely as an employee one wants to know merely how many more days off you have at a given moment? The pay isn't relevant unless you get paid at a different rate for holiday than any other paid day surely?

Holiday pay is paid at a different rate than normal pay. It is related to your total earnings for the year (including incentives and overtime) rather than your salary.

Surely most salaried employees wouldn't get overtime?

4possm

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#1241597 18-Feb-2015 13:17

Geektastic:
4possm:
jonathan18:
afe66: Can't see why they can't pay out more than a week if correct. Maybe to stop employers not giving leave just more cash..

In my case, I didn't really want the leave forced on me, partner working so either I go on holiday by myself or stay at home getting bored after couple of weeks.

They offered the cash and I accepted it.

Previous job similar thing happened. Good thing for bank balance, probably not for work life balance.

A.

The reality is a good employer shouldn't let a leave balance reach anything like these proportions - not just for their own bottom line (the liability of such pay-outs) but also it's their responsibilty to ensure they find someone else to do the job in your absence, and it's clearly poor future planning if they don't have a suitable backup plan in place should you leave or be sick/injured (or fill in when on leave).

My other concern, as someone highly supportive of worker's rights, is that that it's really poor practice by the company to not ensure their employees take (regular) leave from their job, which is important for so many reasons (health, stress, family relationships...). Wow, the practices that firms get away with in the private sector...
The company I work for now, we have a staff member that had so much accrued A/L that we had to force him to take off 1 day every week to run it down because he didn't want to take holidays.
He now has every Wednesday off for the next 2 years.

Ha - that is excellent!

I used to borrow from next year usually so was almost always in arrears. I always wondered what it would be like to use it to have 1 day off a week instead. I never managed to not go on holiday enough to make it work though.

Yeah I'm in the same boat, I currently have 2 days annual leave owing to me :P

Geektastic:
Handle9:
Geektastic: My curiosity related to describing it as pay rather than days off.

Surely as an employee one wants to know merely how many more days off you have at a given moment? The pay isn't relevant unless you get paid at a different rate for holiday than any other paid day surely?

Holiday pay is paid at a different rate than normal pay. It is related to your total earnings for the year (including incentives and overtime) rather than your salary.

Surely most salaried employees wouldn't get overtime?

As long as you never get bonus's never work public holidays etc your Holiday Pay will be identical to your daily rate, however as soon as you work public holidays or get a yearly bonus that does affect your holiday pay.

When I was selling cars my holiday pay rate was nearly $20 an hour more than my base rate. They hated me taking holidays

jonathan18

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#1241600 18-Feb-2015 13:24

4possm: As long as you never get bonus's never work public holidays etc your Holiday Pay will be identical to your daily rate, however as soon as you work public holidays or get a yearly bonus that does affect your holiday pay. When I was selling cars my holiday pay rate was nearly $20 an hour more than my base rate. They hated me taking holidays

Not that it may apply to many if any contributors here, but some events can have a signficantly negative impact on the rate of holiday pay, for example parental leave. My wife experienced this both times going back to work after having kids - it took a year after returning to work for her holiday pay to return to the pre-parental leave level. I'm thinking even paid parental leave (let alone unpaid) will have a negative impact, as it is paid only up to a relatively low maximum.

I'm assuming any long-term leave where the pay is lower or non-existent will impact on the rate of holiday pay?

4possm

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Master Geek

#1241603 18-Feb-2015 13:28

jonathan18:
4possm: As long as you never get bonus's never work public holidays etc your Holiday Pay will be identical to your daily rate, however as soon as you work public holidays or get a yearly bonus that does affect your holiday pay. When I was selling cars my holiday pay rate was nearly $20 an hour more than my base rate. They hated me taking holidays

Not that it may apply to many if any contributors here, but some events can have a signficantly negative impact on the rate of holiday pay, for example parental leave. My wife experienced this both times going back to work after having kids - it took a year after returning to work for her holiday pay to return to the pre-parental leave level. I'm thinking even paid parental leave (let alone unpaid) will have a negative impact, as it is paid only up to a relatively low maximum.

I'm assuming any long-term leave where the pay is lower or non-existent will impact on the rate of holiday pay?

Yeah good point that is certainly correct. any unpaid leave or even ACC etc will affect that.

littlehead

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#1241644 18-Feb-2015 13:52

4possm:
jonathan18:
4possm: As long as you never get bonus's never work public holidays etc your Holiday Pay will be identical to your daily rate, however as soon as you work public holidays or get a yearly bonus that does affect your holiday pay. When I was selling cars my holiday pay rate was nearly $20 an hour more than my base rate. They hated me taking holidays

Not that it may apply to many if any contributors here, but some events can have a signficantly negative impact on the rate of holiday pay, for example parental leave. My wife experienced this both times going back to work after having kids - it took a year after returning to work for her holiday pay to return to the pre-parental leave level. I'm thinking even paid parental leave (let alone unpaid) will have a negative impact, as it is paid only up to a relatively low maximum.

I'm assuming any long-term leave where the pay is lower or non-existent will impact on the rate of holiday pay?

Yeah good point that is certainly correct. any unpaid leave or even ACC etc will affect that.

This is incorrect. Annual leave is paid at the higher of the employee's "Ordinary" rate or "Average" rate, with the Average rate referring to the average amount over the last 52 weeks. You cannot be paid less than what you would of been paid had you worked the day/week/hours normally. While leave without pay can affect a person's average pay rate in the negative, it cannot affect their ordinary rate.

jonathan18

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#1241653 18-Feb-2015 14:04

littlehead: This is incorrect. Annual leave is paid at the higher of the employee's "Ordinary" rate or "Average" rate, with the Average rate referring to the average amount over the last 52 weeks. You cannot be paid less than what you would of been paid had you worked the day/week/hours normally. While leave without pay can affect a person's average pay rate in the negative, it cannot affect their ordinary rate.

Then on what basis did my wife experience a noticeable reduction for a period of 52 weeks in the amount she received for holiday pay both times she returned from work after being on parental leave (both times being a mixture of paid parental leave, unpaid parental leave and annual leave)? I'm not questioning the accuracy of your information, but rather wanting to understand what went on in her case. I'd quite believe her organisation's HR department got it wrong, and would suggest she goes back to have them look at it properly. It could well be her work failed to go with "whichever is higher" part of your post.

Have you got direct references to the legislation/policy governing the requirement to pay at the higher of 'ordinary' or 'average', and has this changed any time in the past 10 years? Thanks!

(edited for sense)

4possm

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#1241654 18-Feb-2015 14:06

littlehead:
4possm:
jonathan18:
4possm: As long as you never get bonus's never work public holidays etc your Holiday Pay will be identical to your daily rate, however as soon as you work public holidays or get a yearly bonus that does affect your holiday pay. When I was selling cars my holiday pay rate was nearly $20 an hour more than my base rate. They hated me taking holidays

Not that it may apply to many if any contributors here, but some events can have a signficantly negative impact on the rate of holiday pay, for example parental leave. My wife experienced this both times going back to work after having kids - it took a year after returning to work for her holiday pay to return to the pre-parental leave level. I'm thinking even paid parental leave (let alone unpaid) will have a negative impact, as it is paid only up to a relatively low maximum.

I'm assuming any long-term leave where the pay is lower or non-existent will impact on the rate of holiday pay?

Yeah good point that is certainly correct. any unpaid leave or even ACC etc will affect that.

This is incorrect. Annual leave is paid at the higher of the employee's "Ordinary" rate or "Average" rate, with the Average rate referring to the average amount over the last 52 weeks. You cannot be paid less than what you would of been paid had you worked the day/week/hours normally. While leave without pay can affect a person's average pay rate in the negative, it cannot affect their ordinary rate.

Where do you get this info from? I have never heard this.
This is what the DOL says:

http://www.dol.govt.nz/er/holidaysandleave/payment-other.asp

The Holidays Amendment Act 2010 introduced a new calculation, ‘average daily pay’ that may be used where it is not possible or practicable to determine relevant daily pay, or if the employee’s daily pay varies within the pay period when the holiday or leave falls. This replaces the four-week averaging calculation that was formerly applied when it was not possible to determine relevant daily pay.

Average daily pay is a daily average of the employee’s gross earnings over the past 52 weeks. That is, the employee’s gross earnings divided by the number of whole or part days the employee either worked or was on paid leave or holiday during that period.

littlehead

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Master Geek

#1241670 18-Feb-2015 14:20

4possm:
littlehead:
This is incorrect. Annual leave is paid at the higher of the employee's "Ordinary" rate or "Average" rate, with the Average rate referring to the average amount over the last 52 weeks. You cannot be paid less than what you would of been paid had you worked the day/week/hours normally. While leave without pay can affect a person's average pay rate in the negative, it cannot affect their ordinary rate.
Where do you get this info from? I have never heard this.
This is what the DOL says:

http://www.dol.govt.nz/er/holidaysandleave/payment-other.asp

The Holidays Amendment Act 2010 introduced a new calculation, ‘average daily pay’ that may be used where it is not possible or practicable to determine relevant daily pay, or if the employee’s daily pay varies within the pay period when the holiday or leave falls. This replaces the four-week averaging calculation that was formerly applied when it was not possible to determine relevant daily pay. Average daily pay is a daily average of the employee’s gross earnings over the past 52 weeks. That is, the employee’s gross earnings divided by the number of whole or part days the employee either worked or was on paid leave or holiday during that period.

The link you quote is not for Annual Leave but other forms of leave, however the principal is mostly the same. From http://www.dol.govt.nz/er/holidaysandleave/annualleave/payment.asp states:

Payment for annual holidays is at the greater of either the ordinary weekly pay at the time the holiday is taken, or the employee’s average weekly earnings over the 12-month period before the annual holiday is taken.

Ordinary weekly pay, or Relevant Daily pay is basically what you should get paid normally. This basically works out that you should never earn less that what you would get paid normally. There can be some weirdness if someone starts and immediately takes annual leave if the employer allows this, but generally this would be paid at their normal rate.

jonathan18:
Then on what basis did my wife experience a noticeable reduction for a period of 52 weeks in the amount she received for holiday pay both times she returned from work after being on parental leave (both times being a mixture of paid parental leave, unpaid parental leave and annual leave)? I'm not questioning the accuracy of your information, but rather wanting to understand what went on in her case. I'd quite believe her organisation's HR department got it wrong, and would suggest she goes back to have them look at it properly. It could well be her work failed to go with "whichever is higher" part of your post.

Have you got direct references to the legislation/policy governing the requirement to pay at the higher of 'ordinary' or 'average', and has this changed any time in the past 10 years? Thanks!

(edited for sense)

This has changed in the past 10 years. There were different definitions of "Average" and "Ordinary". I am unsure what those were unfortunately and was before my time working in payroll.

JaseNZ

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#1241680 18-Feb-2015 14:38

So the story is that I am the employer , At Christmas time this staff member was paid out the 8% of their gross earnings to cover their holidays because they had not been with the business for a year. They asked me the other day when will their next lot of holidays be due because they really needed a break, I tried to explain to them that they would not be eligible for any leave until this Christmas however I could entertain the idea of possibly advancing them some annual leave in a a couple of months as we are still trying to play catchup from Christmas.

That were not impressed at this idea and spat the dummy at me and said I QUIT and walked off the job.

Ding Ding Ding Ding Ding : Ice cream man , Ice cream man

trig42

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#1241685 18-Feb-2015 14:53

Presso: So the story is that I am the employer , At Christmas time this staff member was paid out the 8% of their gross earnings to cover their holidays because they had not been with the business for a year. They asked me the other day when will their next lot of holidays be due because they really needed a break, I tried to explain to them that they would not be eligible for any leave until this Christmas however I could entertain the idea of possibly advancing them some annual leave in a a couple of months as we are still trying to play catchup from Christmas.

That were not impressed at this idea and spat the dummy at me and said I QUIT and walked off the job.

Pretty sure you are in the wrong here.

How long do you close down for at Christmas? Is it 20 working days (not including the Stats)? If so, that is a decent shutdown - over a (calendar) month.

[My_Opinion]

If you close down for less than 20 working days, you need to negotiate with your staff in order to pay them out their whole 20 days that they will have accrued (and then, you cannot pay them more than 5 days more - assuming a 5-day working week).

Your staff are entitled to paid leave before next Christmas, it just comes off their annual leave accrued (which, by the end of March, will be about 5 days for ALL of your full time employees). So if you do then shut down for 20 working days over the next Christmas, those who have taken leave during the year do not get a full 4 weeks holiday pay paid out to them over the break.

It is pretty easy to get advise on this - even some of the vendors for Payroll software (ACE Payroll certainly) will know these rules. You as an employer should be across them, or should have gotten advise before this employee walked out. Hopefully they don't hit you with a constructive dismissal case (from a no-win-no-fee crowd - worst case).

[/My_Opinion]

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#1241691 18-Feb-2015 14:57

Presso: So the story is that I am the employer , At Christmas time this staff member was paid out the 8% of their gross earnings to cover their holidays because they had not been with the business for a year. They asked me the other day when will their next lot of holidays be due because they really needed a break, I tried to explain to them that they would not be eligible for any leave until this Christmas however I could entertain the idea of possibly advancing them some annual leave in a a couple of months as we are still trying to play catchup from Christmas.

That were not impressed at this idea and spat the dummy at me and said I QUIT and walked off the job.

As most leave is accrued, I think you really need to speak to someone about/research employment law before you make decisions that could be wrong and expose yourself to something like a personal grievance or even unfair dismissal. If this employee said "I quit" because what you said was wrong, and they go to an employment lawyer, you could be in all sorts of trouble.

What you need to do next time an employee asks a question like that is say "Let me look into that, and get back to you in the next day or two" and research the legislation.

JaseNZ

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#1241731 18-Feb-2015 15:30

The employee has not been dismissed and I have not heard from them since they walked off the Job. All efforts to contact them have so far failed.

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blakamin

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#1241765 18-Feb-2015 15:50

Presso: The employee has not been dismissed and I have not heard from them since they walked off the Job. All efforts to contact them have so far failed.

I hope for your sake they haven't been told not to answer any of your calls by an employment lawyer.

Because that's the first place I'd be going. (if I was inclined to throw my toys out of the cot and not just explain to you that you were wrong and google the required information at the time).

Sorry.

Quick question... Is this the same employee you had "issues" with earlier?

MikeAqua

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#1243107 20-Feb-2015 15:01

Annual leave entitlement accrues as time. On my payslip it is shown as hours. It ticks up every fortnight. If I want to take leave, I fill in the request form on the payroll website, my employer approves it, and on the days/hours I have entered the hours are deducted from leave balance.

Very simple.

Holiday pay only comes into reckoning in certain circumstances: -

1) Casual/short term employees with no ordinary entitlement to leave are paid holiday pay at 8%.
2) Shut down periods.
3) Other that I don't know about.

It's a practical work around for fairness/simplicity.

If I'm a casual worker I get extra money to keep me going on days I am not earning.

If I'm an employer with an annual shutdown, it's much simpler to administer.

Geektastic: My curiosity related to describing it as pay rather than days off.

Surely as an employee one wants to know merely how many more days off you have at a given moment? The pay isn't relevant unless you get paid at a different rate for holiday than any other paid day surely?

Mike

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