New Zealand employers face a 24-month countdown to overhaul leave entitlements as the Holidays Act is repealed
New Zealand's Employment Leave Bill has passed its third and final reading in Parliament, clearing the way for the biggest overhaul of the country's leave laws in more than two decades.
The legislation, passed on 29 July 2026, repeals the Holidays Act 2003 and replaces it with the Employment Leave Act 2026 – a system built around hourly, rather than weekly, leave calculations.
Workplace Relations and Safety Minister Brooke van Velden said the bill delivers on the Government's priority to replace the broken Holidays Act with a leave system which is simple and straightforward.
The current Holidays Act remains in force for now: a 24-month transition period will run before the new framework takes effect, giving employers, payroll providers and employees time to adjust.
The new Act introduces several structural changes to how leave is earned and paid. Annual and sick leave will accrue in hours rather than weeks, and employees will become entitled to annual, sick, bereavement and family violence leave from their first day on the job – rather than after a qualifying period, as under the current law.
Leave payments will be calculated using a single hourly rate, and a new 12.5% Leave Compensation Payment will apply to additional and casual hours worked. The reforms also introduce more detailed pay statements, greater flexibility for...
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