This presentation by Employsure is designed to help employers understand their rights and obligations when it comes to annual leave. The presentation covers the below topics - How much annual leave do employees get? - Annual leave accrual - Holidays in the first year of employment - Forced annual leave - Annual leave cash out It's often a challenge for owners and managers of SMEs to ensure they are compliant. Small businesses sometimes struggle to understand their obligations to employees and that's where Employsure can help. Employsure protects employers from risks by providing unlimited advice, legally compliant documents, insurance and representation. Employsure is a workplace relations specialist dedicated to helping small businesses succeed by creating fair and safe workplaces. Call us: 0800 675 700 Visit us at: https://employsure.co.nz/ LinkedIn: https://au.linkedin.com/company/employsure-nz Facebook: https://www.facebook.com/EmploysureNZ/ Twitter: https://twitter.com/EmploysureNZ

2. Annual leave
This presentation answers some important
questions about annual leave. For more detailed
information about your obligations as an employer,
visit Employsure.
Topics covered:
• How much annual leave do employees get?
• Annual leave accrual
• Holidays in the first year of employment
• Forced annual leave
• Annual leave cash out
• Employment agreements

3. How much annual leave do employees get?
• Every employee in New Zealand gets at least
four weeks of paid annual leave each year.
• The annual leave entitlement comes into effect
after 12 months of employment.
• An employer may allow an employee to take
leave in advance of its accrual.
• An employment agreement may stipulate a
different amount of annual leave, or a different
length of time employees must serve before
being entitled to leave.

4. Annual leave accrual
• Permanent employees receive a minimum of
four weeks annual leave.
• If an employee works part time, their annual
leave is calculated pro-rata.
• Casual employees are entitled to have annual
leave paid as they work. If an employee is
genuinely casual, they will be entitled to 8%
extra on top of their gross weekly earnings.
This must be specified in the employment
agreement.

5. Holidays in the first year of employment
• During their first year of employment, one of your
employees may wish to take unpaid leave for a
holiday or a break.
• If this happens, the annual leave entitlement is
calculated as though the leave was on top of the
year worked. For example, if an employee takes
one week of leave without pay, the point at which
they are able to get paid annual holidays can be
pushed back by one week.
• Employers may decide not to push back the time
of eligibility for paid annual leave if they wish.

6. When is annual leave paid out?
• Employees are entitled to receive payment of
their annual leave before this period starts,
unless an agreement is in place where the
normal pay cycle continues.
• If this type of agreement is in place, it should be
documented in either the employment
agreement or in writing on a case by case
basis.

7. Can employees be forced to take annual leave?
• With 14 days notice, an employer can require
employees to take annual leave over any
closedown period, like the Christmas period.
This is a common request.
• If an employer and employee cannot agree on
when the individual will take their annual leave,
14 days notice can be given and the employee
must take leave. It is advisable to attempt to
find a compromise before taking this option.
Yes – an employer can force a staff to take annual leave under the following conditions:

8. Can employees be denied an annual leave request?
• The request is genuinely considered.
• There is a valid business reason for
denying the request - like another
employee has already requested leave,
or it is an exceptionally busy time.
Yes – an employer can deny a request under the following conditions:
Employees must be given the opportunity to take at least two of
their four weeks holidays continuously so this should be taken
into account when considering annual leave requests.

9. Cashing out annual holidays
Employees can request an annual leave payout for
up to one of the four weeks they are entitled to – for
each entitlement year.
An employer cannot:
• Force an employee to choose this option.
• Add this into an employment agreement.
• Make it a condition of employment.
• Use it in a negotiation for salary increases.

10. Requests to cash out
To cash out annual leave, the following conditions have
to be met by the employee:
• The request must be made in writing
• The employee must have worked for 12 months or
more
An employer:
• Must genuinely consider the request
• Has the right to refuse
• Is not obliged to give a reason
• Must inform the employee of the decision in writing

11. Employment agreements
The annual leave entitlements outlined in this
presentation are a minimum and are legislated in
the Holidays Act 2003.
While an employee cannot receive less than this,
employment agreements can increase annual leave
entitlements for employees.
If an employment agreement provides for extra
annual leave than the required four weeks, there
may also be a clause that allows the extra time to
be cashed out.