Early planning necessary to avoid unintended non-compliance in the future

Employers across New Zealand have been urged to plan ahead of the major overhaul coming to workplaces' leave system in a bid to avoid unintended non-compliance once the changes take effect.

The changes under the Employment Leave Bill will introduce substantial reforms to the way leave entitlements are earned, taken, and paid following complaints that the current Holidays Act 2003 is complex and confusing.

The bill passed the first reading in March, and is anticipated to be passed later this year.

A recent insight from law firm Dentons is urging employers to plan ahead of the changes despite a two-year transitional period once the bill passes.

"Although the new Bill will not take effect immediately, employers and payroll providers should begin considering its practical implications now," it said in the insight.

It advised employers to check whether existing employment agreements clearly describe standard hours to avoid the need for a notional roster.

It also suggested checking whether working arrangements are correctly categorised, and whether payroll systems can separately record and report on each category.

It also told employers to look into the cases of employees with multiple roles or agreements in their organisation, and whether these are also clearly documented and supported by payroll systems.

"Employers should also be aware that, while there will be three years to update current employment...

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