Holidays Act programme (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.
- The Holidays Act 2003 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 Act.
- Non-compliance with the Act is a widespread issue with many public and private sector organisations facing similar issues.
- We 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.
The Ministry’s role
We are 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.
After we received information about Holidays Act non-compliance from the Public Service Commission and the Labour Inspectorate in March 2016, we engaged an independent organisation to carry out the School Sector Payroll Holidays Act Compliance Review.
This review was completed in December 2016 and identified high-level areas of non-compliance related to the way different types of leave have been paid.
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.
First remediation payment
As work to address Holidays Act non-compliance is complex and taking time to complete, we have made a first remediation payment to most current school employees in June 2023.
The payment was based on an initial estimate covering some leave types for part of the remediation period.
Compliance with the Holidays Act will require a range of solutions, including system, process and practice changes.
After historic errors are corrected, the Ministry is committed to paying remediation on an ongoing basis until the schools payroll is compliant with legislation.
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.
Find out more about remediation:
If you have questions about Holidays Act remediation, the best way to get in touch is via our query form.
You can also contact the team by emailing or calling us:
Freephone 0800 439 333 (NZ only, 8am to 5pm, Monday to Friday)
Last reviewed: Has this been useful? Give us your feedback