‘There's a whole lot of processes that will come into place that are quite different to what people in New Zealand are used to at the moment and have been used to for a long time’
New Zealand HR and payroll teams have just two years to rebuild how they calculate, record and pay staff leave, after the Employment Leave Act 2026 received royal assent on 6 August 2026.
The new law is set to replace the Holidays Act 2003 from Aug. 6, 2028, a change Bell Gully partner Rachael Brown says employers cannot afford to leave until the last minute.
The Act shifts New Zealand from a weeks-based leave entitlement system to accrual measured in hours, applied against an employee's "standard hours" from their first day of work. The legislation also creates new categories of standard, additional and casual hours, each with different accrual and payment rules.
"The Employment Leave Act is now going to change everything to be an hours-based accrual, which – rather than doing a whole lot of different calculations – is going to be a really significant change in New Zealand," Brown told HRD.
Casual workers will not accrue leave under the new framework. Instead, they will receive a 12.5% pay loading in place of annual and sick leave accrual, according to the Ministry of Business, Innovation and Employment (MBIE). Employees without fixed schedules, including many gig workers, will need a "notional roster" established to determine their standard hours,...
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