“Many New Zealand employers audited through the Labour Inspectorate have underpaid staff annual holiday entitlements,” write Julia Shallcrass, employment columnist for the NZ Herald.
Properly accounting for employees who work irregular hours, in particular, “has proven a nightmare for employers…,” Shallcrass notes. “Large employers like the Auckland Council, the New Zealand Police, and even the auditing body, the Ministry of Business, Innovation and Employment, have fallen foul of the law with holiday pay.”
Another potential hiccup for employers with annual holiday pay is how they compensate their employees. “Employers need to do more than just pay staff their usual pay for annual holidays,” Shallcrass writes. “Employers must work out two different calculations–ordinary weekly pay and average weekly earnings–and pay the greater of the two separate calculations.”