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Article | Global News Briefs

New Zealand: Proposed bill would increase employer-paid sick leave

Total Rewards|Future of Work|Health and Benefits
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By Niall Martin | March 9, 2021

Proposal would increase annual employer-paid sick leave from five to 10 days for qualified employees to help reduce the spread of illness and increase productivity.

Employer Action Code: Monitor

The government is seeking to enact a bill that, if passed, would increase employer-paid sick leave from five to 10 days per year. The bill is intended to address the inadequate nature of the current entitlement in the event employees, their partners or children become ill, particularly for workers in the hospitality, retail, manufacturing and construction industries, where employers do not typically offer additional paid sick leave. Separately, the government is introducing legislation to create a new public holiday in 2022, in observance of the Maori New Year (Matariki), as a variable date holiday occurring in May or June.

Key details

Provisions of the Holidays (Increasing Sick Leave) Amendment Bill include the following:

  • The duration of mandatory minimum employer-paid sick leave would increase from five to 10 days.
  • For employees with six or more months of service, the additional five days would be available once they have 12 months of service; other employees would be entitled to 10 days of leave after they have six months of service.
  • The number of unused sick leave days that may be carried forward to the next year would be reduced from 15 to 10 days, but the maximum sick leave entitlement in a year would remain 20 days.

The bill is currently under review in committee. Any changes would take effect two months after the bill is passed as law, which is expected to be around mid-2021.

The Maori New Year is expected to be established as a paid public holiday, first observed June 24, 2022. The date of the holiday would be variable from year to year, based on official estimates of the rising of a cluster of stars (the Pleiades), which usually appears in late May or early June.

Employer implications

According to the government, only around half of all employers provide paid sick leave in excess of statutory requirements. In its view, the enhancement would help avoid the spread of the sickness, leading to fewer absences and increased productivity. Employers are encouraged to monitor the progress of the proposed amendments and review their existing leave policies as well as budget planning to ensure they comply, in the event the proposals become law.

Contact

Niall Martin
Head of Health & Benefits New Zealand

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