Major changes to annual and sick leave: What you need to know
Employees will be able to accrue annual and sick leave from their first day of work after an overhaul of workplace entitlements.
The Employment Leave Bill passed its third and final reading yesterday, replacing the Holidays Act 2003.
Workplace Relations and Safety Minister Brooke van Velden said the changes would benefit workers and businesses.
“This bill delivers on the Government’s priority to replace the broken Holidays Act with a leave system which is simple and straightforward, so that employers have confidence in their calculations, and employees have confidence they are being paid correctly,” van Velden said.
“We’ve already had decades of overcomplicated legislation so now that we’ve finally settled on a simpler path forward, I hope it will be enduring to give businesses and workers the simplicity and stability they need.”
Van Velden said the changes to the new leave system will have a 24-month lead-in to allow time for a careful and managed transition by businesses and payroll providers.
“There will be an additional year after the act comes into force to update leave terms in employment agreements,” she said.
Key aspects of the bill:
- Annual and sick leave accrued in hours, in direct proportion to standard hours of work
- Annual, sick, bereavement and family violence leave available from the first day of work
- Use of a single hourly rate for paying leave, across all types of leave
- A new 12.5% leave compensation payment for additional and casual hours, instead of accruing annual leave and sick leave for those hours
- Mandatory pay statements that itemise pay and leave in a way that’s transparent and easy to understand
- Greater flexibility to cash up annual leave, with workers able to cash up 25% of their total annual leave balance each year
- A new Otherwise Working Day test for those who work additional days or do not have a specified pattern of work
- Removal of annual leave payment penalty for those returning from parental leave.
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