Your Submission Deadline is 14 April — Here's Why You Can't Stay Silent on the Employment Leave Bill

Submissions on the Employment Leave Bill close 14 April 2026. Ministry of Business, Innovation & Employment That's it. That's your window.

You may think your one voice has no impact. I disagree. If everyone speaks up, the resonance becomes huge — and right now, we have less than a week to make that happen.

Submissions on the Employment Leave Bill close 14 April 2026. That's it. That's your window. After that, the Select Committee moves on and the opportunity to shape this legislation is gone.

So let me give you a quick rundown of what's proposed, what concerns me, and most importantly — how to have your say.

What Is the Employment Leave Bill?

The Employment Leave Bill proposes to repeal and replace the Holidays Act 2003 in its entirety. The issues with the current Holidays Act are well-documented — many of its provisions are unclear, overly complex, and difficult to apply, particularly for diverse working arrangements. As a result, there is a significant administrative burden, compliance costs are high, non-compliance is widespread, and employees do not always receive their full entitlements.

The intent is good. The execution... That's what we're here to talk about.

The Big Changes — In Plain English

Leave accrues in hours from day one

Under the new system, annual leave and sick leave both accrue in hours from the first day of employment — not after 6 or 12 months as under the current rules. Annual leave accrues at 0.0769 hours per contracted hour (the equivalent of 4 weeks for a standard full-time worker), and sick leave at 0.0385 hours per contracted hour (equivalent to 10 days per year). The sick leave balance is capped at 160 hours.

This is a meaningful improvement for workers in short-term or variable roles who are currently locked out of entitlements. It will mean ensuring everyone has agreed contracted hours at which to base the leave on.

Leave Compensation Payment (LCP) — the big one for employers

The LCP replaces the current 8% holiday pay for casual and additional hours. The rate is 12.5%. It is paid on every hour worked by a casual employee, and on every additional hour worked by waged or salaried employees above their contracted hours.

That's a 56% increase on the current rate for casual workers.

You do the maths!

Also, it all needs to be itemised separately on every pay statement (payslip).

Annual leave cash-up changes

Workers can now request to cash up 25% of their total annual leave balance each year (calculated at their last 12-month anniversary), rather than the current 1-week entitlement.

Notional rosters

Where an employment agreement doesn't specify days and hours clearly enough to calculate leave, employers will need to include a notional leave roster in the agreement. This will need to reflect actual work patterns and be reviewed regularly.

Meaning this will be added administration to ensure notional rosters are created for each employee that is not on contracted hours, and regularly reviewed.

Parental leave — leave continues to accrue

Annual leave continues to accrue during parental leave, despite no hours being worked. In an hours-based system, this is a structural inconsistency — and the cost impact on employers is significant. You're funding a replacement employee, ongoing leave accrual for the absent employee, and future leave payments on their return.

That's a stacked cost effect that hits small businesses particularly hard.

What Concerns Me

I want to be balanced here — the shift to an hours-based model has genuine merit for simplification and consistency. But there are aspects of this Bill that I believe need to be pushed back on, refined, or rethought entirely.

Here's where I'll be focusing my submission:

The casual LCP rate of 12.5% is too high.

The current 8% was based on actual entitlement usage. The proposed 12.5% funds theoretical entitlements, not real ones. Not every worker accesses sick leave, and not every casual employee achieved entitlement to sick leave. This risks increasing the cost of employing casual workers to the point where businesses reduce casual roles altogether — the opposite of the flexibility the Bill is supposed to create.

Variable pay and leave rates.

The Bill sets the hourly leave pay rate at the base wage for the day of leave. Commissions, bonuses, and variable allowances are excluded. For workers in performance-based or commission roles, this means their leave pay can be significantly lower than their normal weekly earnings.

This creates a disincentive to take leave — which directly undermines the purpose of the legislation.

I am not sure what the solution is here, and they say employees and employers need to negotiate this, but I believe a lot of employees won't be due to fear of asking, meaning it will fall to minimum, therefore having a detrimental effect on their leave payments.

Parental leave accrual in an hours-based model.

If the foundation of this new system is that leave is earned against hours worked, accruing annual leave during periods where zero hours are worked, especially for an extended period of time, is an inconsistency that really needs to be addressed. The burden of costs on small employers is disproportionate and, in many cases, unachievable.

This Is Your Chance — Make a Submission

The Education and Workforce Committee is calling for submissions on the Employment Leave Bill. Submissions close 14 April 2026.

You do not need to write an essay. You do not need to be a lawyer. A submission can be as simple as:

What you support about the Bill
What concerns you — especially how it will affect your business or your people
What you'd like to see changed, even if you can't articulate the exact solution

Every submission is read. Every voice is counted.

👉 Make your submission here: https://www.parliament.nz/en/pb/sc/make-a-submission/document/54SCEDUW_SCF_2FB966C5-C198-4EEB-6F8B-08DE7D8B1137/employment-leave-bill

What Happens Next?

None of the proposed changes are final until the Bill is passed, so it is imperative you have your say before it's too late. There will be a 24-month implementation period between when the Bill is passed and when it comes into force — providing time for payroll providers and employers to make changes to their business and payroll systems.

That 24 months is your runway. Use it. Start reviewing your employment agreements now. Think about your notional rosters and what that may mean for your business. Look at your casual workforce and model what 12.5% LCP means for your labour costs. And most importantly — have your say before 14 April.

This is one of the most significant changes to employment legislation in over two decades. If it doesn't work for New Zealand businesses and workers, we need to say so now — while we still can.

FAQs

What is the Employment Leave Bill NZ?

The Employment Leave Bill is proposed legislation to replace the Holidays Act 2003. It introduces hours-based accrual of annual and sick leave from day one of employment, a new Leave Compensation Payment for casual and additional hours, and a 24-month implementation period once enacted.

When do submissions on the Employment Leave Bill close?

Submissions close on 14 April 2026. The Education and Workforce Select Committee is accepting feedback via the New Zealand Parliament website.

How do I make a submission on the Employment Leave Bill?

Visit the New Zealand Parliament website and search for the Employment Leave Bill submission form. You don't need to be an expert — a few sentences on what you support, what concerns you, and what you'd like changed is sufficient.

How does the Employment Leave Bill affect casual employees?

Casual employees will receive a Leave Compensation Payment (LCP) of 12.5% of their ordinary hourly wage rate instead of accruing annual and sick leave. This is an increase from the current 8% holiday pay rate under the Holidays Act 2003.

When will the Employment Leave Act come into force?

There is a 24-month implementation period between when the Bill passes and when it comes into force. The Government has indicated it intends to pass the legislation within the current parliamentary term.

Di Crawford-Errington is CEO of The Ontrack Group, President of the Institute of Certified NZ Bookkeepers (ICNZB), and Founder and Managing Director of the Small Business Training Hub. She has more than 20 years' experience working with New Zealand employers on payroll, employment obligations, and compliance.

Categories: : Annual Leave, Legislation Updates, Parental Leave, Payroll