New Zealand Passes 2028 Leave Law Cutting Annual Leave Pay for Some Workers

3 articles · Updated · 1News · Aug 16

New Zealand’s Employment Leave Act has passed and will replace the Holidays Act in 2028, with unions and legal experts warning some workers could lose hundreds of dollars a week when taking annual leave.
Under the new formula, leave will usually be paid at a worker’s lowest applicable hourly or salary rate rather than the current higher-of test that can include 12 months of overtime, commission and some bonuses.
Alison Maelzer of Hesketh Henry said the change will hit employees who rely on overtime, incentives or commission, potentially discouraging leave-taking and increasing employers’ leave liabilities when unused leave is paid out.
Workers First Union said low-hours staff who regularly work extra shifts may find leave suddenly unaffordable, while Otago’s Paula O’Kane warned the law will depend heavily on fair contracts and employer interpretation.
The law also brings some gains, including sick leave from day one and normal-rate parental leave on return, but critics say casual workers’ sick-leave treatment remains problematic.