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Our premier guide to employer obligations under the Holidays Act. It includes definitions of key terms, calculation of annual holiday payment, and the relationship between annual leave and other types of leave.
At the end of each completed 12 months of continuous employment, an employee is entitled to 4 weeks’ paid annual holidays.
The entitlement to annual holidays is a weekly entitlement; however an employer and employee may agree how that entitlement is to be met based on what genuinely constitutes a working week for the employee.
Continuous employment does not include, unless an employer and employee agree, unpaid leave of greater than 1 week (this does not include when the employee is sick, injured, bereaved, on paid holidays, on ACC, on parental leave, or on protected voluntary service or training).
If an employee’s employment is broken by unpaid leave, the date on which the employee becomes entitled to annual holidays may change.
An employer may have only 1 “customary” closedown period in any 12-month period during which it may require employees to take their annual holidays; however it may close down its operations or discontinue the work of its employees on arrangements that apply during those times, by agreement.
An employee may take annual holidays in advance, if the employer agrees.
If an employer and employee agree, and certain conditions are met, the employer may pay the employee’s annual holiday pay regularly with the employee’s pay.
If an employer requires an employee to take annual holidays, the employer must give the employee 14 days’ notice of that requirement.
The calculation of annual holiday pay depends on the circumstances which apply. Different calculations apply to the calculation of annual holiday pay which is taken in advance, after entitlement has arisen, on termination of employment, at a closedown period, and after a period of parental leave.
If an employee (or the employee’s spouse or dependant) is sick or injured while taking annual holidays, the employer may agree to reinstate the employee’s annual holiday and grant sick leave for the period.
If an employee suffers a bereavement while taking annual holidays, the employer must reinstate the employee’s annual holiday and grant bereavement leave for the period.
If an employee (or the employee’s spouse or dependant) becomes sick or is injured, or the employee suffers a bereavement before the employee’s scheduled annual holidays, then the employer must allow the employee to take sick or bereavement leave.
If an employee becomes entitled to annual holidays during or after a period of parental leave, the employer should require the employee to take those annual holidays sooner rather than later because the value of those annual holidays increases with time.
An employer is required to keep a detailed holiday and leave record for every employee.
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