Holidays Act Payments
We've been reviewing our payroll processes
Kāinga Ora, along with other Government agencies and New Zealand businesses, has been working to correct issues that have led to some current and former employees receiving incorrect payments under the Holidays Act 2003 (the Act). We've completed this work and became compliant with the Act on 23 September 2020.
If you worked for Kāinga Ora, Housing New Zealand or HLC from 14 July 2010 to 23 September 2020, you may be entitled to a remediation payment.
We have identified some former employees who are due a remediation payment and let them know by letter and/or email.
If you haven’t received any information from Kāinga Ora about our Holidays Act remediation, and believe you may be entitled to receive a payment, complete the form below:
Once you’ve submitted the form, we will contact you to confirm whether you are owed a payment. If you are owed payment, you will be asked to provide us with documents to verify your identity. Once these steps have been completed, we can process your payment.
Paying our employees correctly going forward is a priority and we have completed a range of system, process and policy changes to ensure ongoing compliance with the Holidays Act 2003. We implemented these compliance changes on 23 September 2020.
We are also providing remediation and leave repayments to some current and former employees of Kāinga Ora, HNZ and HLC employed between 14 July 2010 and 23 September 2020, the date we became fully compliant with the Act.
So far, we have:
- Established a project team and carried out an in-depth review to identify areas of non-compliance with the Act.
- Worked with vendors and a range of key stakeholders to ensure that any proposed solution was compliant with the Act.
- Planned an approach and schedule to complete future compliance changes and historical remediation payments.
- Engaged two payroll specialists and a payroll vendor to help calculate remediation payments and correct any non-compliance issues.
- Implemented new payroll system changes, and created policies and processes to comply with the Act.
- Provided remediation payments to our current employees who have been impacted.
What we are working on now
- We will begin the first round of remediation payments to previous employees in early 2021.
- We will continue to work with the State Services Commission, Government agencies, external employment lawyers and unions to ensure our payroll processes, remediation and leave payment is consistent, fair and accurate.
What is the Holidays Act?
The Holidays Act 2003 sets out leave entitlements for employees and aims to promote a balance between work and other aspects of the lives of employees. It provides employees with minimum leave entitlements such as:
- annual holidays
- alternate holidays
- public holidays
- sick leave
- bereavement leave
The Act sets out how leave and final pay are calculated and paid.
Further information can be found in the MBIE Leave Guide(external link)
What is the issue?
Compliance issues with the Holidays Act have been identified in a number of Government agencies and New Zealand businesses. Like many other organisations, our payroll system and processes did not meet all of the obligations set out in the Act. As a result, we undertook a review process with the support of external experts to resolve compliance issues and provide remediation for leave entitlements owed to some current and former employees.
What types of leave are we addressing?
The issues relate to entitlement and payment of the following leave categories:
- annual holidays
- bereavement/tangihanga leave
- alternative holidays
- public holidays
- sick/dependent care leave
- family/domestic violence leave
- employment relations education leave
What timeframe does the remediation cover?
Kāinga Ora will be backdating payments to six years from the date that compliance issues were first identified in July 2016. So, remediation payments will be calculated from 14 July 2010.
Which employees does this apply to?
You may be eligible to receive a remediation payment from Kāinga Ora if you are a current or previous employee of the following organisations:
- Kāinga Ora employees from 1 October 2019
- Housing New Zealand employees from 14 July 2010
- HLC employees from 14 July 2010
Will the remediation include former Kiwibuild employees?
The Ministry of Housing and Urban Development (MHUD) is responsible for any remediation payments to KiwiBuild employees prior to 1 October 2019. To find out more, email MHUD Human Resources at firstname.lastname@example.org
Why were leave payments incorrectly calculated?
The Holidays Act is a complex piece of legislation and the method for calculating various types of leave entitlements has led to calculation errors for some current and previous employees.
Calculations can be difficult as the Act refers to Annual Holidays being paid in weeks, while other types of leave such as bereavement leave, alternative holidays, public holidays and sick leave (BAPS), are paid in days. Employers will often accrue, calculate and pay leave in hours (i.e. half day = 4 hours).
There are also different ways of calculating what an employee should be paid for a specific day or week of leave such as Ordinary Weekly Pay, Average Weekly Earnings, Relevant Daily Pay and Average Daily Pay. If the incorrect method of calculation is used, it can result in overpayment or underpayment to an employee.
Calculation errors can also happen when employees receive additional allowances, lump sum payments, work regular overtime, or their daily or weekly hours vary. The way payments are set up to be included or excluded from gross earnings for the purposes of leave calculations can also impact entitlements.
What remediation work has been done?
Earlier this year, Kāinga Ora engaged a group of specialists to undertake a thorough review of our payroll systems and processes. Our internal specialists and external payroll and legal experts worked together to develop a method to identify and calculate historical payment errors to current and former employees. Our remediation process has been independently audited by Ernst & Young to ensure we have the right processes and systems in place to correctly pay current and former employees for any leave payments they may be owed.
When did Kāinga Ora become compliant with the Holidays Act?
Paying our people correctly going forward is a priority and we completed a range of system, process and policy changes to ensure ongoing compliance with the Holidays Act. We implemented these compliance changes on 23 September 2020.
How much will I receive?
Any remediation payment owed will be calculated individually. As earnings history and leave patterns are unique to each person, each payment amount will be different.
What deductions or contributions will impact remediation payments?
Remediation payments are classed as earnings and therefore subject to the following deductions/contributions:
- PAYE (Tax). This will be at the ‘Extra Tax’ rate. (Visit the IRD website for more information on Extra Tax. You can also contact Inland Revenue directly on 0800 227 774)
- Student Loan deductions
- If you are a current KiwiSaver member your current contribution rate will apply. Kāinga Ora will also provide the 3% employer contribution for eligible members.
What happens if I was overpaid because of an incorrect leave payment?
Under the previous payroll processes and systems, some current and former employees may have been overpaid. Kāinga Ora acknowledges that all payments were made and received in good faith and will not be seeking to recover any overpayment.
I left the organisation and then returned. Will this affect my remediation payment?
Each period of service will be calculated individually. If you are entitled to multiple payments, they will be consolidated and paid to you as one single payment.
How do I know if I’m eligible for remediation?
If you are eligible for a payment, we’ll contact you by email or letter using the details we currently hold. We will need specific documentation from you to verify your details and process the payment into your nominated bank account.
If you haven’t heard from us and believe you might be owed payment as part of our Holidays Act remediation, complete our online Holidays Act payment form.
When will I receive my payment?
Once we have validated your documents, we will advise you of your payment date. Payments will be processed on a monthly basis.
What if I don’t claim my payment?
In line with sections 6, 7 and 8 of the Unclaimed Monies Act 1971, where monies have not been claimed, they will be transferred to the Inland Revenue Department (IRD).
Can my payment be made to an overseas bank account?
We can only make payment into a nominated New Zealand bank account. This does not have to be an account held in your name.
What happens if a former employee who has been impacted is deceased or is otherwise unable to make a claim?
To check whether a remediation payment is owed, you’ll need to complete our online Holidays Act payment form to verify your identity and provide documentation confirming you are authorised to act on behalf of the estate or person.
I've received a very small payment. Why was I paid such a small amount?
We are required by law to ensure you receive any payment owing to you no matter how small the sum.
Can I donate my payment to charity?
We are unable to donate your payment directly to charity. You can choose to make a donation once you have received your payment.
Did you engage with the Public Service Association (PSA)?
Yes. We engaged with the PSA on compliance and remediation prior to the establishment of the project and on key issues throughout the project.
Has the remediation process been independently audited?
We engaged the services of independent remediation experts from Ernst & Young to conduct a comprehensive audit of the process and calculations. The audit was completed prior to making payments.
Have current employees who were impacted received their remediation payment?
Yes. As part of our remediation, we identified and recalculated the leave owing to some current employees who were impacted before undertaking the same process for former employees. We provided remediation payments to everyone in the organisation that was impacted on 11 December 2020.
For more information
If you have any questions about our Holidays Act remediation, contact us at email@example.com
We will be updating these FAQs as we progress.
Definitions of leave and leave payment rates under the Holidays Act 2003.
annual holidays: Provide employees with paid time off work for rest and recreation.
bereavement/tangihanga leave: Paid leave that employees can use if someone close to them dies.
alternative holiday: This is provided to an employee for working on a public holiday that would otherwise be a normal working day.
public holiday: Under the Holidays Act 2003, there are 11 public holidays, in addition to annual holidays. An employee is entitled to a public holiday if the holiday falls on a day that the employee would otherwise have worked.
sick/dependent care leave: Paid time off work if an employee, their spouse, partner, dependent child or other dependent is sick or injured.
employment relations education leave: Provided to union members to increase their knowledge about employment relations.
family/domestic violence leave: May be provided to an employee affected by family violence.
DBAPS leave: This is a collective term for family/domestic violence leave, bereavement leave, alternative holiday, public holiday and sick/dependent care leave.
Leave Payment Rates
Ordinary Weekly Pay (OWP)
Ordinary Weekly Pay is used to calculate payment for annual holidays and is the amount an employee is normally paid each week.
Ordinary Weekly Pay – 4 week (ORD4)
Where it is not possible to calculate ordinary weekly pay due to variable weekly pay, a formula is used to calculate the previous four weeks’ gross earnings.
Average Weekly Earnings (AWE)
Average Weekly Earnings are an employee’s gross earnings in the 12 months before the end of the last pay period, before an annual holiday is taken, divided by 52.
Relevant Daily Pay (RDP)
Public holiday, bereavement/tangihanga, sick/domestic leave, alternative holiday and employment relations education leave payments are calculated using Relevant Daily Pay or Average Daily Pay. Relevant Daily Pay is what an employee typically earns in one day.
Average Daily Pay (ADP)
Where Relevant Daily Pay cannot be calculated, or an employee’s daily pay varies in the pay period in question, Average Daily Pay may be used. Average Daily Pay is the daily average of an employee’s gross earnings over the past 52 weeks.
Page updated: 17 December 2020