OUTLINE
Annual leave in New Zealand
Maternity, paternity, and parental leave in New Zealand
Adoption leave in New Zealand
Other types of leave in New Zealand
Public holidays in New Zealand
Protect your employees and your business
Leave policy in New Zealand
Creating a well-defined leave policy can help you become an employer of choice. To do this effectively, you must understand the labour laws and regulations governing leave entitlements and paid time off.
In New Zealand, employees are entitled to various types of leave as prescribed by the Employment Relations Act 2000 and the Holidays Act 2003. These leave entitlements are designed to offer balance between work and personal life, while also providing job protection during periods of illness, bereavement, and parenthood.
Here’s a brief overview of several types of paid leave in New Zealand, which we’ll discuss further in this guide:
Annual leave in New Zealand
After 12 months of continuous employment, employees are eligible for 4 weeks of annual holidays (annual leave).
Public holidays in New Zealand
If employees would have otherwise worked on public holidays, they receive paid time off.
Sick leave in New Zealand
An employee receives 10 days of sick leave annually after six months of continuous employment. Employees have the ability to carry over up to ten unused sick days each year, which can accrue to a maximum of 20 days.
This is aligned with the legislative changes made by the New Zealand Parliament through the Holidays Amendment Bill, which have notably enhanced the sick leave provisions for employees.
The sick leave policy applies across various employment types, including full-time, part-time, and fixed-term contracts, provided the fixed-term spans more than six months. In addition, casual employees also qualify for sick leave once they have achieved six months of continuous employment under the same employer, if they’ve consistently worked an average of ten hours a week, with at least one hour every week or 40 hours each month.
This entitlement allows employees to recover from illness without the worry of lost income, helping to maintain a healthy workforce. Meanwhile, it’s important to note that sick leave entitlements are not pro-rated in New Zealand.
Parental leave in New Zealand
Employees can be eligible for various types of parental leave if they meet certain conditions, which include maternity leave, paternity leave, and extended leave for caring for young children.
Annual leave in New Zealand
Paid annual leave is a key entitlement for employees to ensure they can enjoy rest and recreation away from the workplace. Employees become entitled to at least four weeks of paid annual holidays (annual leave) after completing 12 months of continuous employment with their employer. This entitlement is crucial for promoting work-life balance and the overall well-being of the workforce.
Taking the annual leave can sometimes vary. Employers and employees may negotiate the timing of leave to accommodate workplace needs and personal preferences. However, the law stipulates that employees must have a reasonable opportunity to take their annual leave. While the default entitlement is four weeks, some employment agreements may grant more than the minimum requirement.
Moreover, the legislation ensures that employees are compensated during their annual leave. This compensation is paid at the rate of what the employee would ordinarily earn if they were at work. The calculation of the payment for annual leave takes into account various factors and can sometimes be complex, especially for employees with variable hours or earnings.
Employers are also required to keep accurate records of leave entitlements and usage, ensuring transparency and fairness in how annual leave is managed and administered. This system helps in maintaining a fair and equitable workplace, where employees can reliably access their leave entitlements.
Can you cash out annual leave in New Zealand?
Yes, employees have the option to cash out up to one week of their annual leave each year. To do this, the request must be made in writing. However, employers are not required to approve the cash-out. If employers do not approve the cash-out, they can offer employees the option to carry over their unused leave.
The entitlement to cash out annual leave comes into effect after the employee has completed 12 months of employment. Any cashed-up leave is paid out at the rate that the employee would have been paid if they had taken the leave as a paid holiday.
Maternity, paternity, and parental leave in New Zealand
Maternity leave law in New Zealand
Maternity leave in New Zealand is governed by the Parental Leave and Employment Protection Act 1987. The law ensures that employees who are expecting a child have the right to take leave from work to care for their newborn or adopted child.
Maternity leave policy in New Zealand
The concept of maternity leave is more broadly referred to as primary carer leave. This provision supports not only female employees who are expecting a child, but also spouses, partners, or any employee who will permanently assume the primary role in nurturing, caring for, and overseeing the development of a child under six years old.
Employees who are expecting a baby or adopting a child may be eligible for several types of leave:
- Primary carer leave: This type of leave is available to the primary carer of a newborn or adopted child and can last up to 26 weeks. As the name suggests, it is meant for the main caregiver of the child and is not limited to biological mothers. Maternity leave begins on the due date or upon the arrival of the child. In other circumstances, such as adoption, leave starts from the moment the employee takes on the primary carer’s responsibility for the child. Subject to prior agreement with the employer, employees can take this leave flexibly, initiating primary carer leave up to six weeks ahead of the expected due date or the commencement of primary care responsibilities.
- Partner’s leave: Partners of primary carers can take unpaid leave to support the primary carer, ensuring they also have time to bond with the child.
- Extended leave: Following primary carer leave, both parents can share up to 26 additional weeks of extended leave, depending on the circumstances.
- Negotiated carer leave: This type of leave provides flexibility for those who do not fit into the other categories of leave or who need special arrangements.
The specific type of parental leave an employee can take will depend on their individual circumstances, including the duration they have been employed and the nature of their employment contract.
To support parents during this period, New Zealand also offers financial assistance through its paid parental leave scheme, which provides eligible primary carers with government-funded payments to help mitigate the loss of income during their leave.
In addition, employment protections are provided to ensure that parents taking leave can return to their job or a similar position upon the completion of their leave.
Paternity leave law in New Zealand
The primary legislation covering paternity leave is the Parental Leave and Employment Protection Act 1987. Under the Act, partners of primary carers can qualify for what is referred to as ‘partner’s leave’. Partner’s leave allows the partner of a person who is the primary carer of a new child to take this leave entitlement to support them.
Paternity leave policy in New Zealand
The partners (which include fathers, same-sex partners, or those in a de facto relationship) of new mothers or primary carers can qualify for partner’s leave to take the time off around the arrival of a new child.
Partners are eligible to start their leave up to three weeks prior to the expected delivery date of their child, or from the time when their spouse or partner assumes the role of primary carer for a child under the age of six.
The leave period extends for a duration of 21 days from the birth of the baby. This can be extended if the newborn is hospitalised beyond the 21-day period, which ends on the day the baby is discharged from the hospital or when the spouse or partner steps into the primary carer role for the child.
Parental leave policy in New Zealand
There are four main types of parental leave available in New Zealand, which include primary carer leave, partner’s leave, extended leave, and negotiated carer leave.
The type of leave an individual is entitled to can vary depending on their personal circumstances, with each category tailored to meet different needs during the transition into parenthood.
Paid parental leave in New Zealand
Similar to salaries or wages, paid parental leave payments are taxable income. These payments are made by Inland Revenue, and the net amount is disbursed to the recipient after deductions such as tax, child support payments, or student loan repayments, if applicable. The structure of this system ensures that while carers are on leave, they receive financial support, which helps ease the transition into parenthood or the adoption process.
Moreover, from July 1, 2024, individuals who opt for KiwiSaver deductions from their paid parental leave payments will also receive employer contributions of 3%.
Adoption leave in New Zealand
Employees preparing to bring a child under the age of six into their home on a permanent basis may qualify for relevant adoption or parental leave provisions. The designated primary guardian is entitled to a single, uninterrupted period of primary carer leave, which can last up to a maximum of 26 weeks.
Importantly, eligibility for this leave requires that the employee has been consistently engaged with their current employer for a minimum of 10 hours each week throughout the six months leading up to the day they take on the caregiving role.
This policy ensures that adoptive parents have the opportunity to establish a bond with their child, similar to the leave afforded to biological parents.
Employees planning to adopt a child are required to inform their employer as soon as possible, ideally three months before the expected date of the child coming into their care. This communication allows employers to adequately prepare for the employee’s absence.
Other types of leave in New Zealand
There are other types of leave being offered in New Zealand.
Aside from statutory leave such as annual, sick, and bereavement leave, employers often provide or agree to various types of leave. Although the law does not mandate these, employers can offer them to employees as part of their employment package or through collective agreements. Common types of non-statutory leave include:
Miscarriage paid leave in New Zealand
New Zealand has legislation in place that provides for paid leave following a miscarriage. The country’s Parliament approved legislation that offers three days of paid leave after a miscarriage or stillbirth, allowing those affected to grieve without the need to use their sick leave.
Special leave in New Zealand
The special leave covers various types of leave outside the standard annual, sick, and bereavement leave entitlements. Special leave specifically refers to the entitlement for pregnant employees. They are entitled to up to 10 days of unpaid special leave to attend pregnancy-related medical appointments, antenatal classes, or to deal with issues related to their pregnancy or childbirth. This special leave is in addition to the parental leave benefits and does not affect the employee’s entitlement to parental leave.
Extended leave in New Zealand
Extended leave provides parents with additional unpaid time off, which is determined by their tenure with the company. Employees who have completed at least 12 months of service may be eligible for up to an extra 52 weeks of leave. Meanwhile, those who have been with the company for a minimum of six months can qualify for an additional 26 weeks of leave.
Leave without pay in New Zealand
This is an arrangement in which an employee takes time off work but does not receive payment for the period. Employees typically use it when they have exhausted their paid leave entitlements or wish to take a longer period of leave for personal reasons.
Long service leave in New Zealand
Some employers reward employees for their loyalty and long service to the company by providing additional leave, often after a significant number of years of service.
Leave in lieu of notice in New Zealand
In certain situations, employers may offer ‘garden leave’ to employees who are resigning or facing termination, allowing them to leave without working their notice period. During this period, they would continue to receive payment.
Leave during and after a natural disaster in New Zealand
Employees may be able to access special leave provisions in the event of a natural disaster affecting their ability to work or their workplace’s functionality.
To ensure clear expectations for both parties, it’s crucial for employees and employers in New Zealand to discuss and agree upon these types of leave and to document them in employment agreements or policies.
Public holidays in New Zealand
1 January
New Year’s Day
2 January
Day after New Year’s Day
22 January
Wellington Anniversary Day
29 January
Auckland Anniversary Day
29 March
Good Friday
1 April
Easter Monday
25 April
Anzac Day
3 June
King’s Birthday
28 June
Matariki
28 October
Labour Day
25 December
Christmas Day
26 December
Boxing Day (except SA)
Public holidays provide employees with paid time off on days of national significance. If an employee works on a public holiday, they are entitled to remuneration at a rate of at least time and a half, and possibly an alternative holiday, ensuring employees are fairly compensated for their time.
In addition, employers may request employees to work on a public holiday if the need arises and if it is written into their employment agreement. However, if their employment agreement stipulates it, employees retain the right to refuse to work on public holidays.
When holidays fall on a weekend, employers can conveniently defer these days off to the next working day to ensure no disruption in employees’ entitlement to leisure time.
Protect your employees and your business
As an employer in New Zealand, you need to understand your employees’ rights and entitlements. But keeping up with them can be a lot of work.
When you hire workers with CXC, we’ll ensure your engagements are in line with all local, national and international employment regulations. That way, your workers will get their benefits they’re entitled to, and your business will be protected from risk.
Compliantly hire employees anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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