New Zealand’s national payroll body is calling on the government to standardise how payroll systems calculate holiday pay across the country to prevent widespread errors from continuing.
NZ Payroll Practitioners Association chief executive David Jenkins said that, under the Holiday Pay Act, it was a “nightmare” trying to establish accurate pay for part-time employees who work different hours and days each week. As a result, thousands of part-time workers were likely missing out on annual leave entitlements due to the way payments are calculated.
There are currently two ways to work out holiday pay - either on the basis of ordinary weekly pay at the beginning of the holiday, or based on average weekly earnings over the previous 12 months. Employers must pay whichever sum is higher.
But according to Stuff, Jenkins said that employers who use “set-and-forget” payroll systems – which calculate on the basis of what is laid out in an employee's contract, for instance, as opposed to what they actually earn - ended up not paying staff enough.
"There are over 90 different payroll systems in the country, and there is no national certification required. Some companies use payroll systems developed in other countries and apply it to New Zealand," he said. "It's no wonder that hundreds of thousands of workers are not being paid correctly."
For example, in 2016, about 3,000 staff at the Ministry of Business, Innovation and Employment (BIE) were not paid their full holiday pay entitlement.
As a result, Jenkins called on the government to step in and standardise how payroll systems calculate holiday pay by ensuring they all work out pay by weeks of accrued holiday leave rather than hours and days.
Unite Union's national director Mike Treen said many businesses, especially in the fast food industry, were failing to pay their staff at the correct rate. But he refused to accept that such a calculation was complex, pointing out that BIE provides a formula for calculating holiday pay on its website.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
New Zealand’s national payroll body is calling on the government to standardise how payroll systems calculate holiday pay across the country to prevent widespread errors from continuing.
NZ Payroll Practitioners Association chief executive David Jenkins said that, under the Holiday Pay Act, it was a “nightmare” trying to establish accurate pay for part-time employees who work different hours and days each week. As a result, thousands of part-time workers were likely missing out on annual leave entitlements due to the way payments are calculated.
There are currently two ways to work out holiday pay - either on the basis of ordinary weekly pay at the beginning of the holiday, or based on average weekly earnings over the previous 12 months. Employers must pay whichever sum is higher.
But according to Stuff, Jenkins said that employers who use “set-and-forget” payroll systems – which calculate on the basis of what is laid out in an employee's contract, for instance, as opposed to what they actually earn - ended up not paying staff enough.
"There are over 90 different payroll systems in the country, and there is no national certification required. Some companies use payroll systems developed in other countries and apply it to New Zealand," he said. "It's no wonder that hundreds of thousands of workers are not being paid correctly."
For example, in 2016, about 3,000 staff at the Ministry of Business, Innovation and Employment (BIE) were not paid their full holiday pay entitlement.
As a result, Jenkins called on the government to step in and standardise how payroll systems calculate holiday pay by ensuring they all work out pay by weeks of accrued holiday leave rather than hours and days.
Unite Union's national director Mike Treen said many businesses, especially in the fast food industry, were failing to pay their staff at the correct rate. But he refused to accept that such a calculation was complex, pointing out that BIE provides a formula for calculating holiday pay on its website.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
