Entitlements are tricky

Legally everyone is entitled to four-weeks' annual leave. Farmer Freddy is learning how to work out such leave for his part-timer.

Farmer Freddy is feeling stressed. His part-time worker Jane is complaining that Freddy is not calculating her annual leave entitlement and holiday pay correctly. So, armed with Jane's time sheets, Freddy goes to consult Pebbles.

"Pebbles," he tells her, "Jane wants me to give her 20 days off for annual leave each year even though she only works two or three days a week. That can't be right, can it? I need to get this sorted out so I can do my roster for the Christmas holiday period."

"Well, Dad," Pebbles tells him, "calculating holiday entitlements for part-time workers who work over weekdays and weekends is tricky. Legally, everyone is entitled to four weeks' annual leave. For a full-time employee that amounts to 20 working days of annual leave. The tricky bit with an employee like Jane, who works part-time with varying hours from week to week, is determining what genuinely constitutes her working week."

But, Pebbles," Freddy asks, "how do I work it out? Whenever I talk to Jane about it we cannot agree."

"Don't panic Dad," Pebbles assures him. "The things you need to take into account include Jane's employment agreement, her work patterns, and other relevant factors, including:

  • whether she only works for you when work is available,
  • your rosters,
  • Jane's and your reasonable expectations that she would work on the day concerned,
  • whether, but for the day being a public holiday, an alternative holiday, or a day on which Jane was on sick leave or bereavement leave, she would have worked on the day concerned.

"If you and Jane can't agree on what genuinely constitutes a working week for her, you can ask a labour inspector to make that determination for you."

"OK, Pebbles, I'll have another talk with Jane and see if we can use what you have told me to come to an agreement.

"But what about Jane's holiday pay? Jane says I didn't pay her correctly when she took a week off last month. How do I calculate her pay when she does take annual leave?"

Pebbles explains that the law requires employers to pay workers the greater of either the ordinary weekly pay at the time the holiday is taken, or the worker's average weekly earnings over the 12-month period before the annual holiday is taken.

Ordinary weekly pay represents everything an employee is normally paid weekly, including regular allowances and productivity or incentive-based payments, the cash value of board or lodgings and regular overtime.

Average weekly earnings are determined by calculating gross earnings over the 12 months prior to the end of the last payroll period before the annual holiday is taken, and dividing that figure by 52.

The Department of Labour website www.dol.govt.nz has all the details of how to calculate ordinary weekly pay and average weekly earnings.

"OK, Pebbles," says Freddy. "I better have a look that website and then have another talk with Jane."


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