Annual leave entitlement question

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Loismustdye

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#277053 23-Sep-2020 17:33

Discussing with my wife as she has recently changed her job from 40 hours a week to 30.

Prior to this change (this week) she had 6 days of annual leave accrued that was owed to her (ie 6x 8 hours =48 hours). It is recorded on her payslip in days not hours.

As this leave was earned at the previous rate (8 hours = 1 day), would this convert to a higher number on her pay sheet? Ie would the 6 days AL now be 8 days to represent her current 6 hour day so as not to diminish the value of the accused leave.

Thanks

gcorgnet

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#2572982 23-Sep-2020 17:44

I would think she'd only have to appply for 0.75 Annual leave for each day she wants to be away as each day is worth 8h and she only works 6h

Handle9

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#2572983 23-Sep-2020 17:50

If she recently changed roles it should be fine. The days would remain constant but the holidays will be paid at a higher rate than she currently gets paid.

The calculation of payment is based on the highest of a variety of calculations methods. In her case it would likely be the average pay for the last 12 months.

https://www.employment.govt.nz/leave-and-holidays/calculating-payments-for-leave-and-holidays/calculating-annual-holiday-payments/#:~:text=the%20pay%20for%20those%20annual,comparison%20to%20ordinary%20weekly%20pay).

andrewNZ

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#2572987 23-Sep-2020 18:08

I'm pretty sure the current situation where companies are having to recalculate incorrect holiday calculations is related to this question.

I believe the days amount is correct, and in this situation your wife is disadvantaged.

If she'd gone from 30 to 40 hours she'd have gained.

PolicyGuy

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#2573017 23-Sep-2020 19:53

Handle9:

If she recently changed roles it should be fine. The days would remain constant but the holidays will be paid at a higher rate than she currently gets paid.

The calculation of payment is based on the highest of a variety of calculations methods. In her case it would likely be the average pay for the last 12 months.

https://www.employment.govt.nz/leave-and-holidays/calculating-payments-for-leave-and-holidays/calculating-annual-holiday-payments/#:~:text=the%20pay%20for%20those%20annual,comparison%20to%20ordinary%20weekly%20pay).

This is correct.
Her Relevant Daily Pay would be at the 40 hrs/wk rate

She should discuss it with her HR / Payroll people, she ought to have the choice of taking six days at the eight hours per day rate, or eight days at the six hours per day rate

Handle9

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#2573020 23-Sep-2020 20:04

From what I understand of the legislation leave is calculated in days, not hours so I don't think you get the option. I could be wrong, I'm not a payroll expert but have had to work with staff to understand their entitlements.

Where this could disadvantage OPs wife is if the leave isn't taken fairly promptly as the rolling 12 month average would start to drop. It works in your favour when you get a pay increase but not so much when you have a pay decrease and don't take leave promptly.

The holidays act is a bit of a mess and clearly really difficult to administer.

It'd pay to get something in writing from the HR department sooner rather than later.

Loismustdye

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#2573023 23-Sep-2020 20:19

Thanks for the advice, will have a chat with her and let her know.

it just came about this afternoon when we were discussing her leave over the school holidays, and I queried her leave balance being in days as mine is in hours (large public entity).
thanks

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andrewNZ

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#2573104 23-Sep-2020 22:03

My partners workplace has just gone through the holiday recalculation stuff recently. At the end they actually took more than a week off her... She complained and was initially fobbed off, but a well worded email suggesting good faith failures and the possibility of lawyers sorted it pretty quickly.

It's definitely worth querying, even if it's not a mistake, they may correct it out of good will.

Tzoi

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#2573264 24-Sep-2020 09:41

The Holidays Act calculates it in days and the amount you are paid as noted above is based on the higher of the current daily rate or average daily rate. In this case, the average daily rate will be higher - the amount she would get is higher than her current daily rate (because it is an average including the 8 hour days) but lower than the amount she was paid when she was working 8 hour days.

Many employers accrue it on an hourly basis, but the Holidays Act actually only provides you with your four weeks on your anniversary day.