{"id":208904,"date":"2021-08-02T17:42:24","date_gmt":"2021-08-02T04:42:24","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=208904"},"modified":"2021-08-03T21:44:45","modified_gmt":"2021-08-03T08:44:45","slug":"mistakes-to-avoid-annual-holiday-pay","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/employment\/mistakes-to-avoid-annual-holiday-pay\/","title":{"rendered":"3 Mistakes to Avoid With Annual Holiday Pay In Your New Zealand Business"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Annual holidays and holiday pay are consistent problems for many businesses in New Zealand. This is because understanding your <a href=\"https:\/\/legalvision.co.nz\/employment\/summary-of-leave-entitlements-new-zealand\/\">business\u2019 obligations<\/a> and the law around annual holiday pay can sometimes be tricky. There are a range of common mistakes your business should avoid when managing annual leave issues. This article covers three mistakes to be aware of, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">pressuring employees unreasonably to cash out their annual leave;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">disallowing employees to take annual leave without a good reason; and\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">not keeping detailed holiday and leave records.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Pressuring Employees to Cash Out Their Annual Leave<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There is a common misunderstanding regarding cashing out annual leave. In short, while employees can request to cash out their annual leave in cash, there are limits on the extent to which they can do this. Likewise, <a href=\"https:\/\/legalvision.co.nz\/employment\/annual-holidays\/\">employers cannot pressure employees<\/a> into doing this.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Suppose an employee has completed a year of work with your business. In this case, they can request to cash out a week of their annual leave per year from their first anniversary at your business. This is the date after they have completed twelve months of service. They can also request to cash out less than a week of annual leave if they so choose. As the employer, your business can say no to these requests. Note, you do not necessarily have to give a reason for this refusal, though it is best practice to do so.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, while employees can request a cash out for part of their annual leave, employers cannot pressure them to make this request. Therefore, you should not raise it with the employee when negotiating over a pay rise or similar situation. You also should not request that employees cash out their annual leave in exchange for something else.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Disallowing Employees to Take Annual Leave<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">By default, your business should be allowing employees to take annual leave when they choose to do so. Annual leave is an essential entitlement in New Zealand, protected under employment legislation. Everyone has a range of interests and responsibilities outside work, including to their family and community.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It may be the case that your business cannot afford to allow employees to take annual leave at a particular time. For example, there may be a some short-term need for all hands on deck. In that case, you must be careful with managing the situation. Particularly if employees have their annual leave booked, it is unreasonable and against your obligation of good faith to require employees to stay at work and take their annual leave at a later date.\u00a0<\/span><\/p>\n\n\n<div  class=\"box\">\n    <p><span style=\"font-weight: 400;\">If you really do require employees not to take annual leave at a particular time, you should discuss with an employment lawyer. A lawyer will assist you to best structure your <a href=\"https:\/\/legalvision.co.nz\/employment\/employment-records\/\">employment agreements<\/a> according to the needs of your business. <\/span><\/p>\n<\/div>\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+64800005570\" class=\"not-prose\">0800 005 570<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    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This is a requirement for all employers. There are serious legal consequences, including fines and other penalties, if you cannot show that you have correctly ensured that all of your employees have had the holidays they are entitled to.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You must keep records for at least seven years, ideally in electronic form that is easy to navigate and access. There are other reasons beyond the legal requirement why it is a good idea to keep detailed records of holidays and leave. For example, suppose there is a dispute with an employee later on about their holidays or the leave that they are entitled to. In that case, it is crucial to have a robust record system to be able to check and ascertain what the employee\u2019s entitlement is. Dedicated software can help with this, although there will still be the need to keep the records up-to-date regularly.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Key Takeaways<\/span><\/h2>\n<p style=\"padding-left: 40px;\"><span style=\"font-weight: 400;\">Managing annual leave and other entitlements is a consistent issue for New Zealand businesses. You can save your business stress and legal issues in the future by avoiding some common mistakes. As an employer, do not pressure your employees to cash out their annual leave. Likewise, take proactive steps to ensure your employees can take their annual leave when they want to. Finally, your business must keep track of the holidays and other entitlements for employees, not least because detailed record-keeping is required under the law in New Zealand.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For more information about managing annual holiday pay, contact <\/span><a href=\"https:\/\/legalvision.co.nz\/employment-lawyers-lp\"><span style=\"font-weight: 400;\">LegalVision\u2019s employment lawyers<\/span><\/a><span style=\"font-weight: 400;\"> on <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or complete the form on this page.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Frequently Asked Questions<\/span><\/h2>\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1627878791724\"><strong class=\"schema-faq-question\"><strong>Can employees cash out their annual leave?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, after an employee has worked in a role for at least a year, they can request that up to a week of annual leave is paid out as cash. However, employers can reject these requests.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1627878802152\"><strong class=\"schema-faq-question\"><strong>Can employers force employees to cash out their annual leave?<\/strong><\/strong> <p class=\"schema-faq-answer\">No. Employers have to be very careful when pressuring or asking employees to cash out their annual leave. However, if you are concerned about an employee\u2019s annual leave balance, discuss this with an employment lawyer.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1627878813082\"><strong class=\"schema-faq-question\"><strong>Do employers need to keep records of holidays and leave entitlements?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, employers are required under law to keep seven years\u2019 worth of records for employees, including holidays and leave. This obligation continues even after an employee has left the business.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>Annual holidays and holiday pay are consistent problems for many businesses in New Zealand. This is because understanding your business\u2019 obligations and the law around annual holiday pay can sometimes be tricky. There are a range of common mistakes your business should avoid when managing annual leave issues. This article covers three mistakes to be<a href=\"https:\/\/legalvision.co.nz\/employment\/mistakes-to-avoid-annual-holiday-pay\/\">Continue reading <span class=\"sr-only\">&#8220;3 Mistakes to Avoid With Annual Holiday Pay In Your New Zealand Business&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13235,"featured_media":87,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[5],"tags":[25,54,183,315,577],"class_list":["post-208904","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","tag-small-business","tag-medium-business","tag-annual-holidays","tag-annual-leave","tag-employment-agreement"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>3 Mistakes to Avoid With Annual Holiday Pay | LegalVision New Zealand<\/title>\n<meta name=\"description\" content=\"Understanding your business\u2019 obligations with annual holidays can be tricky. 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