Update on Holidays Act Overhaul: Progress and Priorities

The long-awaited reform of the Holidays Act has encountered yet another delay, with the government missing its deadline for replacement. This situation has left businesses uncertain about updating their payroll systems, prompting concerns about compliance and financial implications.

Five years ago, the government pledged to replace the current law, which has caused organisations substantial liabilities due to leave and shift work pay breaches. Although a new bill is in the works, the window for its introduction to Parliament before the election has closed.

Concerns arise over how to adapt payroll systems to potential changes. Here are three key takeaways from this situation:

1. Promised Reforms Delayed: Five years after the government vowed to replace the problematic Holidays Act, the anticipated bill is still under drafting. Organisations exposed to substantial liabilities from leave and shift work pay breaches have eagerly awaited this overhaul.

2. Balancing Precision and Timeliness: While the delay is disappointing, Workplace Relations Minister Carmel Sepuloni emphasised the need to prioritise accuracy over haste. Recognising the issues arising from the current act, she's committed to avoiding similar problems by ensuring thoroughness in the new legislation.

3. Navigating Complexity and Communication: The drafting process has come under scrutiny, with a payroll specialist labelling it as "spin and hype." An industry working group member reported challenges in communication and rushed interactions with officials. He highlighted the need for comprehensive understanding, especially given the intricate nature of payroll systems.

Amidst these challenges, the government say they are determined to create a comprehensive, clear, and effective Holidays Act. Although time constraints might impact the parliamentary introduction, the focus on getting the details right reflects the commitment to a smoother transition.

We at ResolvePay hope that this delay provides an opportunity to rethink the approach and come up with a solution that is truly fit for purpose for businesses and employees across New Zealand. We hope a simplified calculation methodology, that can deal with the complexities faced by many New Zealand businesses, can be used so as to properly overhaul and refresh this outdated Act, rather than putting more bandaids over the problem.

Read more here:
https://www.rnz.co.nz/news/political/495467/holidays-act-overhaul-delayed-until-after-the-election