The Employment Leave Bill was introduced to Parliament in March 2026 and this week passed its third and final reading. Once enacted, the Bill will repeal and replace the Holidays Act 2003 and significantly change how leave is determined, provided, and calculated in New Zealand.

The Bill was introduced in response to widespread concerns among employers, employees, and payroll providers that the Holidays Act 2003 is complex, unclear and difficult to apply to modern working arrangements. It aims to replace the current regime with a framework that will achieve simplicity, clarity and improved compliance.

Key changes

New categories of working hours

The Bill introduces a new distinction between different types of working hours. This distinction is central to how leave will accrue and whether a leave compensation payment applies.

The Bill distinguishes between:

• standard hours: hours an employee is required to work under their employment agreement, and for which the employer must pay the employee;
• additional hours: hours an employee works above their standard hours (including hours an employee may be required to work under an availability provision), where the employer must make an additional payment for those hours; and
• casual hours: the hours worked by an employee where the employer is not required to offer work and the employee is not required to accept work offered.

Where an employee’s standard hours are not sufficiently specified in their employment agreement or work...

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