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The Nightmare before Easter…..

What is it about Easter that makes one of the people professions scream??

Twas the night before Easter and all round the house, nothing was stirring, not even a mouse....

Okay the rhyme might be from the wrong holiday but over the next few days, as you have time off with family, enjoy some autumnal weather and probably eat waaaay too much chocolate - do remember that Easter can be a nightmare for one set of people professionals.


Because while the world deliriously thinks all payroll does is press the magic pay button each month - actually there is no button.

There also two rather large problems.

The first is that almost all payroll systems in New Zealand DO NOT fully comply with the Holidays Act. And so it’s payroll who have to manually check that everyone is actually going to be paid correctly and the payments comply with legislation.

At Easter there is also the issue of calculating the right pay rate for public holidays, complicated further if people are working different hours AND woe betide you if you have casuals in the workplace. I’m not sure even Google could programme an algorithm to check if they are actually a casual or not. Again payroll are the ones having to check every single work pattern to see if it would have been an ordinary working day.

Then there’s the employees who think that Easter Sunday is a holiday and they should get time and a half. It’s not. Only Good Friday and Easter Monday are. Payroll have the fun job of explaining that 700 times as people check their payslips.

So the second problem is the Holidays Act is extremely complicated to apply because it was designed for 9 - 5, Monday to Friday work places, which no longer exist.

The APPNZ Payroll Advisory had four fixes to the Holidays Act they suggest would make it easier to apply:

  1. Creating a clear definition of regular vs irregular overtime hours. These come into play in calculating leave yet it’s unclear when overtime is regular or irregular. Having a definition around if it was every 4 weeks, or 6 weeks for example would give payroll some consistent guidelines to work with.

  1. Ordinary weekly earnings vs average weekly earnings is a headache not just for payroll to have to recalculate every pay period, but also for employees to understand what they will be paid their annual leave at. If all holiday pay was paid at either OWP or AWE – but one or the other – it would solve many miscalculations and many hours of having to compare the two.

  1. Whether bonus payments are discretionary or not and whether they should be included in holiday pay is also an area that’s very grey and means every bonus payment has to be considered separately. The fix would be for the Holidays Act to stipulate that anything taxable that an employee is paid goes into holiday pay calculations.

  1. The last issue is that most payroll systems accrue leave in hours, however the Holidays Act is in weeks (or days). If for example you allow an employee to take 2 hours sick leave, then their holiday pay calculations are broken and payroll has to spend hours to try and calculate what they should be, without any guidance from case law or the legislation. If leave accrued in hours and was deducted in hours it would solve all issues with employees who work different hours per shift or day.

One of the Associations mandates is to consult with Government so that issues with the legislation being applied can be worked through before it is introduced. In the future,  every New Zealander should be paid correctly. We will be working to put forward these suggestions on the Holidays Act and stop making Easter such a nightmare for payroll!

: People Matter

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