Cras congue quam nec velit scelerisque, in fringilla urna gravida. Ut porta non est id dictum. Etiam et dictum nunc. Vestibulum ornare risus vel ligula congue finibus in in tellus. Integer bibendum scelerisque odio, et facilisis libero. Maecenas nec suscipit urna, congue dignissim ligula. Maecenas magna velit, venenatis blandit metus a, aliquam dapibus enim.
Leave Remediation Consulting
Employment Leave Act 2026
The Holidays Act is being replaced. Is your payroll ready?
New Zealand's new Employment Leave Act changes how annual leave, sick leave and pay are calculated for every employer in the country. Here's what it means for employers, what to start looking at now, and how to prepare your payroll environment before the new rules take effect.
What's changing with the Employment Leave Act 2026?
The Employment Leave Act 2026 replaces the Holidays Act 2003 with an hours-based model for leave. It's a significant change to how leave is earned, tracked and paid.
Five changes every NZ employer needs to plan for
Hours-based accrual
Annual and sick leave will accrue against hours worked rather than days, replacing the current day-based system.
Leave compensation payments
Employers will pay 12.5% of ordinary hourly wages on additional and casual hours, instead of those hours accruing leave.
Immediate leave access
All employees, including casual staff, will have access to bereavement and family violence leave from day one.
Cashing up annual leave
Employees will be able to exchange up to 25% of their leave balance for cash, up from the current one-week limit.
Written notional rosters
Where agreements don't specify set hours, employers and employees will need to agree a written notional roster.
Key dates
You have time to prepare but not to wait
Aug 2026
Employment Leave Act receives Royal Assent
Nov 2026
New Zealand general election. Timeline could still shift.
2026–2027
Technical guidance released to payroll providers in stages.
Aug 2028
Act comes into force. New rules apply.
What to do to prepare for the Employment Leave Act 2026?
Preparing for the Employment Leave Act starts with understanding your position today. There are practical steps employers can take now to identify existing issues and prepare their people, processes and systems for the new leave rules.
Four things employers should be doing now
Get a clean baseline before the new rules land
Fusion5's Leave Remediation Consulting gives you an independent, practical review of how your organisation is currently calculating and paying leave — so you know exactly where you stand under the Holidays Act, before the Employment Leave Act adds a new model on top.
Recommended before 2028
Leave Remediation Consulting
- Independent audit of historical leave calculations against current legislation
- Clear identification and quantification of any shortfalls
- A practical, well-documented remediation plan your team can act on
- Policy and process recommendations to close the gaps going forward
- A clean compliance baseline ahead of the 2028 transition
Why now?
Remediation takes time. Records need to be gathered, calculations checked, and any corrections agreed with your people. Starting now means it's done well before attention shifts to the bigger job of implementing the Employment Leave Act itself.
Frequently asked questions
Lorem ipsum dolor sit amet, consectetur adipiscing elit?
Sed pellentesque dictum mi, accumsan vehicula nibh rhoncus id?
Vivamus congue consectetur elit, ut consectetur ipsum cursus quis. Etiam elementum pulvinar felis vel semper. Suspendisse eget arcu et augue dignissim rhoncus. Etiam quam sapien, pharetra vitae suscipit vel, accumsan at dui.
Lorem ipsum dolor sit amet, consectetur adipiscing elit?
Cras congue quam nec velit scelerisque, in fringilla urna gravida. Ut porta non est id dictum. Etiam et dictum nunc. Vestibulum ornare risus vel ligula congue finibus in in tellus. Integer bibendum scelerisque odio, et facilisis libero. Maecenas nec suscipit urna, congue dignissim ligula. Maecenas magna velit, venenatis blandit metus a, aliquam dapibus enim.
Sed pellentesque dictum mi, accumsan vehicula nibh rhoncus id?
Vivamus congue consectetur elit, ut consectetur ipsum cursus quis. Etiam elementum pulvinar felis vel semper. Suspendisse eget arcu et augue dignissim rhoncus. Etiam quam sapien, pharetra vitae suscipit vel, accumsan at dui.
Talk to a Leave Remediation specialist.
Tell us a little about your organisation and one of our HCM & payroll specialists will be in touch to talk through your current situation and whether a Leave Remediation Consulting engagement could help.
