Posted on: Jun 11, 2015
10 June 2015
The Ministry of Business, Innovation and Employment (MBIE) reminded employers today that part time employees who work regular rostered hours are entitled to pro-rated holidays and leave.
The Ministry’s Labour Inspectorate regularly sees cases where people working part time are not getting their legal entitlements because the employer assumes they can just pay eight per cent on top of their usual pay to cover off their holiday entitlements.
“Employers need to remember that it is only acceptable and lawful to add eight per cent of the employee’s gross earnings as annual holiday pay to their regular pay packets for employees who are on a fixed term contract or who work irregularly or intermittently — for instance on-call workers. In all other cases the four weeks’ pro-rated rule applies,” says Labour Inspectorate Southern Regional Manager Stuart Lumsden.
“We will take action if we encounter these breaches of employment law. For example, the Labour Inspectorate issued an improvement notice to The University of Canterbury Students Association Inc. (UCSA) after receiving a complaint from a former employee who claimed he had not received the correct entitlements for annual leave and sick leave. Our investigation found at least 14 UCSA employees were not receiving their holiday and sick leave entitlements because they were described as ‘casual’.
“In reality, they were part-time employees whose work patterns were established on a roster. They were therefore entitled to four weeks’ holiday pay, pro-rated, under the Holidays Act 2003. Employees who have been working with the employer for six months or more even part-time and casual employees were also entitled to five days’ sick leave, if they meet a certain criteria,” says Mr Lumsden.
UCSA repaid the employees over $15,000 in arrears and rectified its practices.
Employers need to ensure they comply with employment standards as failure to do so not only harms their staff but is ultimately a cost to their business.
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