Kristy Elstone ran a practical session this week walking employers through the Employment Leave Act 2026, the legislation set to replace the Holidays Act 2003.
If you missed it live, the recording is now available - you can watch it here.
Here's a quick taste of what's covered.
The Holidays Act 2003 is still in force right now, and nothing changes today. The new Act was introduced in March 2026 and passed in August 2026, but most of it doesn't commence until 6 August 2028. There's a remediation provision and changes to government-funded parental leave payments that start earlier. Kristy was clear that the results of the upcoming election could shift some provisions such as sick-leave entitlements and leave payment calculations - so treat the detail as provisional until the post-election positions are settled.
The biggest structural change is the move from leave measured in days and weeks to leave accrued hourly, based on each employee's contractual or notional roster. Where hours can't be pinned down from the agreement, the employer and employee will need to agree a written notional roster that reflects actual work patterns. If they can't agree, a Labour Inspector can determine it. This matters most for employers with variable-hour teams, particularly in horticulture, transport and healthcare, since the roster drives leave accrual, when leave can be taken, and how public holidays are treated.
On entitlements, the quantum stays broadly familiar - 4 weeks' annual leave, 10 days' sick leave (for full time staff), 3 days' bereavement leave for immediate family - but access starts from day one and everything is administered in hours rather than days or weeks. Sick leave for part-timers becomes proportionate to hours worked rather than a flat entitlement, and accrual pauses at 160 hours until sick leave is used.
Payroll and pay statements will see real change too. A single hourly leave rate replaces the current multiple calculations, and casual and additional hours will attract an automatic 12.5% Leave Compensation Payment (replacing the current 8% holiday pay loading). The LCP is paid every pay period rather than accumulated. That's a cash-flow and budgeting conversation employers will need to have with casual and variable-hour staff well ahead of time, since the loading is spent progressively rather than sitting there for when leave is actually taken. Pay statements will also need to separately show standard hours, additional hours, the LCP, and leave accrued and taken - with family-violence leave kept off standard statements unless the employee personally asks for it.
A transition period runs from 6 August 2027 to 6 August 2029 during which time every employer in New Zealand will be required to update the employment agreements of their employees to the new legislation. The implementation of the change itself happens at the start of the first pay period on or after 6 August 2028. There is a legislated transition plan where existing leave balances convert from weeks/days to hours, but there's no protection for the monetary value of those balances. Leave tied to commission, bonuses or averaging could be worth less once it's actually taken under the new rules.
Kristy's advice for right now: “keep operating under the current Act, use this window to audit your leave records and payroll calculations, start talking to your payroll provider about what's coming, and hold off rewriting employment agreements until the legislation and regulations are more settled next year.”
If you want to talk through what any of this means for your business specifically, get in touch with the team at GrowHR.