Holidays Act compliance – Schools payroll

The Ministry is addressing non-compliance with the Holidays Act 2003 to ensure current and former school employees receive what they are owed.

Overview

The Holidays Act 2003 (the Holidays Act) promotes work-life balance by setting out minimum holiday and leave entitlements for employees.

An initial review of the schools payroll system in 2016 identified high-level areas of non-compliance with the Holidays Act.

Non-compliance with the Holidays Act is a widespread issue with many public and private sector organisations facing similar issues.

The Ministry will make remediation payments to affected current and former school employees to correct errors made from 1 March 2010 onwards.

We face a unique set of challenges in calculating arrears for the school sector and this work will take time to complete.

Our work

The Ministry’s role

The Ministry is undertaking Holidays Act remediation on behalf of 2500 schools, and for around 200,000 current and former employees across 400,000 roles.

The schools payroll is the largest in New Zealand and there are many complexities resulting from a large number of employment agreements, and associated payroll processes and practices.  

We are working closely with the Labour Inspectorate and our Sector Working Group which includes representatives from education sector unions and the New Zealand School Trustees Association.

Identifying non-compliance

After we received information about Holidays Act non-compliance from the Public Service Commission and the Labour Inspectorate in March 2016, we engaged Deloitte to carry out the School Sector Payroll Holidays Act Compliance Review.

This review, completed in December 2016, identified high-level areas of non-compliance related to the way pay for different types of leave has been recorded, calculated and applied. 

Since then, we have completed significant work to understand the extent and root causes of non-compliance for current and former schools employees.

Preparing for remediation

We have progressed complex work with sector representatives on remediation principles and payroll data rules.

Work to determine compliant solutions, build and test a remediation calculator, and prepare the large historic payroll dataset for calculations is ongoing.

Once the data is ready and calculations run, we will test the output to validate our results. We will also seek independent assurance before payments are made.

Holidays Act review

The Government has accepted the Holidays Act Taskforce’s recommendations to make the Holidays Act clearer and provide greater certainty for employees and employers.

The Ministry of Business, Innovation and Employment (MBIE) is working towards the introduction of an amended Bill in 2023. Once the parliamentary process is complete and the Bill is enacted, there will be a transition phase before it comes into force.

In the meantime, the current legislation applies and we retain an obligation to remediate school employees for historic underpayments.

Read more about the Holidays Act review on MBIE’s website(external link).

More information

Read the School Sector Payroll Holidays Act Compliance Review – Initiate Phase Summary Paper [PDF, 2.2 MB]. 

Find out more about our schools payroll remediation programme. 

Contact us

If you have questions, you can contact the team by:

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