Implementation of the Employment Leave Act 2026
The new Act comes into force from the 6 th of August 2028, and although that feels like a long lead time the change will be on us before you know it.
There are actions that employers can take over the next few months to make the change process easier for their business. MBIE have provided a high-level timetable of what employers can be doing to be ready for the change How employers can get ready for the changes coming in 2028 | Employment New Zealand and will be publishing guidance and resources over the next few months.
Here are some of the actions you should consider starting now:
- Get to know the provisions of the Act. Note that Part 1 (Preliminary provisions) includes the definition of the terms used, and defines standard, additional and casual hours and notional rosters. Part 2 (Transitional provisions) includes the conversion formulas for weeks and days to hours – this will be important for testing payroll/HRIS changes.
- Go through your employment agreements and document leave conditions that are greater than the provisions under the new Act – these will need to be addressed as part of employment agreement negotiations.
- Document any leave types that are unique to your organisation or industry that sit outside the Act. Payroll providers will be focussing on building the legislative accrual and payment requirements, but you need to make sure that your payroll system will still accommodate other calculations.
- Make sure your current leave balances and calculations are correct – fix any issues early.
- Understand your workforce and how their hours are structured – use employment agreements and payroll data to match current hours to the new categories (standard, additional and casual) so you can correctly identify and apply them under the new provisions.
- Get your payroll team to document any anomalies they come across, and any processes affecting leave that they may do on an infrequent basis (such as purchase of additional leave) to make sure that you cover off as much as possible in testing.
- Payroll and HRIS providers will be working hard to build the functionality required and although the accrual and payment rules have been simplified this is far from a straightforward process. Make sure you engage with them early and frequently.
- Communicate the changes clearly to your staff.
Because most employers will be changing across to the new rules on the same day you will need to have a clear plan and make sure you are well resourced for testing and implementation. Testers, HRIS experts and payroll staff will be in high demand!