Minimum Sick Leave Entitlement Increase

On 24 July 2021, the minimum employee sick leave entitlement will increase from 5 to 10 days per year.

The main purpose of the Holidays (Increasing Sick Leave) Act 2020 is to increase the availability of employer-funded sick leave for employees to better enable New Zealand employees to access sick leave when they are sick or injured, or when their spouse or partner or someone who depends on them for care, is sick or injured.

What you need to know:

New employees employed on or after 24 July 2021, will be entitled to 10 days’ sick leave entitlement after six months of continuous employment with an employer.  Casual employees will only be entitled to sick leave after six months of employment if they have worked an average of at least 10 hours per week and at least one hour a week or 40 hours a month.

Existing employees will be entitled to 10 days sick leave on their next entitlement anniversary.  If employees have worked for the employer for less than six months, they will only be entitled to 10 days’ sick leave after completing six months’ employment.  Accordingly, businesses need to be mindful that the timing of the change for each employee’s’ sick leave entitlement will differ.  Employees who already receive 10 or more sick days a year will not be affected by this change.

Maximum amount of unused sick leave is unchanged.  Accordingly, employees may carry over up to 10 days’ sick leave per year and can accumulate a maximum current entitlement of 20 days per year. 

With this impending timeframe in mind, it is a good opportunity for businesses to ensure that employment agreements are compliant and payroll systems have been updated.

For any employment needs, please contact the Employment Team at Saunders & Co Lawyers – Andrew Riches, Claire McCool, and Deborah Hendry for more information and advice.