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 (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 Act.
Non-compliance with the 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.
The Ministry’s role
We are undertaking Holidays Act remediation on behalf of 2,500 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, completed in December 2016, 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.
While we continue work to fully address Holidays Act errors, we are making a series of payments based on initial estimates. This means some of the money owed can be paid sooner.
Compliance with the Holidays Act will require a range of solutions, including system, process and practice changes.
After historic errors are addressed, the Ministry is committed to paying remediation on an ongoing basis until the schools payroll is compliant with legislation.
The Ministry of Business, Innovation and Employment (MBIE) has been reviewing the Holidays Act.
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.
Find out more about our schools payroll remediation programme.
If you have questions about Holidays Act remediation, the best way to get in touch is via our query form.(external link)
You can also contact the team by:
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