Update: The Holidays (Increasing Sick Leave) Amendment Bill has been passed by the New Zealand Parliament and will enter into effect on 24 July 2021.
The New Zealand government introduced a new bill to increase statutory employer-paid sick to 10 days per year. The new bill aims at ensuring employees remain at home when they are sick to avoid the spread of disease in the workplace.
The new bill would amend the Holidays Act 2003 and is expected to enter into force mid-2021 (two months after the bill receives royal assent).
Key details
The new bill applies to all employees, including full-time, part-time, permanent, and fixed-term and casual as long as they work at least 10 hours per week or 40 hours per month with at least one hour per week.
Currently, employees are entitled to five days of paid sick leave after six months of service. If the bill passes, all current employees will be entitled to 10 days of employer-paid sick leave when their next 12 month-sick leave entitlement period begins. Newly hired employees will continue to be required to serve a six-month period to being entitled the 10 days of sick leave.
To ensure employees maintain the limit on accrual of 20 days of sick leave, the bill reduces the number of unused sick leave days that employees can carry forward from 15 days to 10 days to maintain that maximum statutory accrual threshold. Employers are allowed to grant additional sick leave carryover at their discretion. Sick leave continues to be paid at normal wages/salary, including bonuses, overtime, etc.
Likewise, the conditions of sick leave remain the same. Sick leave may be taken when an employee, their spouse or dependent is sick or injured. Employees are required to inform their employer of their intention to take sick leave as soon as possible and employers are entitled to request proof of sickness when an employee is on sick leave for at least three days. Accumulated sick leave may not be exchanged for payment unless expressly agreed upon in the employment contract.
Next steps
Employers who do not offer supplemental leave to their employees might want to monitor the implementation timeline of the new amendment and update their existing internal leave policies accordingly. Additional changes to leave entitlements are expected to be implemented in the next couple of years as the the New Zealand government is planning to revamp the Holidays Act.
