Employment Leave Bill, explained: How annual and sick leave entitlements are changing

The Employment Leave Bill, set to become law, aims to simplify leave entitlements for workers and employers. Currently, the Holidays Act 2003 causes confusion, leading to numerous remediation payments and complexity in navigating the system. The new bill repeals the act, effective in two years, with employment law expert Bronwyn Heenan praising its simplicity for both employers and employees.

Workers after 12 months of continuous employment are entitled to either their ordinary weekly pay or an average over 12 months for annual leave. The new system will accrue leave on standard hours, and any hours worked above that will receive a 12.5 percent compensation payment. Casual workers will receive 12.5 percent instead of the previous 8 percent on top of their usual pay.

Sick leave remains a minimum of 10 days after six months of employment, accumulating up to 20 days, but casual workers will no longer receive sick leave.

Under the new system, leave is banked, so employees can use accrued leave in future roles with different hours. If an employee works more hours, their leave balance increases, and if they work fewer hours, their balance decreases accordingly. Bereavement and family violence leave entitlements remain unaffected for all workers. The new bill is expected to reduce the complexity and complexity of calculating leave entitlements, benefiting both workers and employers.