Unpacking the Employment Leave Act

Send us your feedback In this episode, employment partners Gillian Service and Megan Evans revisit their earlier discussion on the proposed reforms and compare those expectations against the final legislation. They unpack what has changed, what has stayed the same, and the practical steps employers should be taking now to prepare for implementation. \[00:30] Gillian and Megan reflect on their previous discussion about the proposed reforms and explain that most of the anticipated changes have made their way into the final Act. They recap the key themes from the earlier Bill and identify the refinements introduced during the legislative process. \[02:03] Megan explains the shift from weeks-based annual leave to an hours-based accrual system. The pair discuss the increased flexibility for employees, the treatment of accrued leave balances during transition, and the ability for employees to cash out up to 25% of their annual leave balance each year. \[06:11] Gillian outlines how sick leave will accrue from day one of employment and be measured in hours rather than days. They discuss the implications for part-time employees, fixed-term workers and employees with multiple jobs, noting that while the overall entitlement remains broadly the same, the way it is calculated will change significantly. \[08:39] Gillian discusses the removal of six-month qualifying periods for bereavement leave and family violence leave. These entitlements will now be available from the start of employment, including for casual and fixed-term employees. \[09:10] Gillian and Megan examine the new public holiday framework and the revised "otherwise working day" test, including the use of a 13-week look-back period. They explain how the final legislation addresses concerns raised during the select committee process and why employers should review employment agreements and work patterns regularly. \[13:42] The discussion turns to employees who hold multiple roles with the same employer and the introduction of the notional roster concept. Megan explains how notional rosters will be used to calculate leave entitlements where working patterns are not clearly defined in employment agreements. \[16:36] Gillian highlights one of the major objectives of the reforms: simplifying leave payments. The pair discuss the move away from multiple Holidays Act calculations to a single hourly leave rate, the treatment of allowances, and the introduction of mandatory pay statements. \[19:50] Megan explains how the new Leave Compensation Payment regime will operate. They discuss the 12.5% payment applicable to additional and casual hours, why time off in lieu cannot be used as a substitute, and the payroll implications for employers. \[21:31] Gillian and Megan clarify the difference between standard hours, additional hours and casual hours under the Act. They emphasise that correctly categorising hours will be critical because leave entitlements and Leave Compensation Payments are calculated differently for each category. \[24:08] The two-year transition period is examined in detail. The pair discuss when the legislation will take effect, the interaction between employment agreements and the new minimum standards, and the risks of delaying preparation for implementation. \[28:07] Gillian summarises the conversation by identifying four practical priorities for employers: understanding workforce data, engaging with payroll providers early, preparing employee communications, and continuing Holidays Act remediation work. Gillian emphasises that organisations that begin preparing now will be better positioned for a smooth transition to the new regime. **Resources** Unpacking the Holidays Act Reform ***Information in this episode is correct as at the date of recording, Wednesday, 19 2026.***   Please contact Gillian Service, Megan Evans or our Employment law team if you need any legal advice and guidance on any of the topics discussed in this episode. And don’t forget to rate, review or follow MinterEllisonRuddWatts wherever you get your podcasts. You can also email us directly at [website.enquiries@minterellison.co.nz](mailto:website.enquiries@minterellison.co.nz) and sign up to receive Employment law updates via your inbox here. For show notes and additional resources visit minterellison.co.nz/podcasts