By Mandy Hale & Sascha Nicoll
On 24 July 2021, the Holidays (Increasing Sick Leave) Amendment Act came into force. This law reform both increased sick leave entitlements from five days to 10 days per year and decreased the number of days an employee can carry over year-on-year from 15 to 10. What the new law didn’t change is the maximum cap on sick leave entitlement – this will stay at 20 days.
Sounds simple, right? But for some employers and HR professionals, this seemingly straightforward law change has caused a bit of administrative grief. The new sick leave entitlements didn’t increase for every employee the moment that the law changed on 24 July. Instead, employees would become eligible for the increased 10 days only on their first, or next, sick leave anniversary date, after 24 July 2021, meaning every employee will have the right to 10 sick days at different times.
“How do I work out when my employees can have 10 sick days instead of five?”, was the most common question our clients were asking us through the HR Assured Telephone Advisory Service. To answer this question and others, I spoke to Sascha Nicoll, Employment Relations and Safety Consultant at HR Assured and asked her to provide some clarity for small business owners across Aotearoa. Below I share Sascha’s answers to help you understand how to make sure your staff are receiving the correct number of sick days under the new law.
Sascha, here’s the big question: when do employees become entitled to 10 days’ sick leave?
It’s a bit tricky to answer that one! Not all employees will be able to access the increased number of sick days at the same time.
Any new employee who completes six months of continuous service with the same employer after 24 July 2021 will be entitled to 10 days of sick leave. Some of your new employees may have started their first day before 24 July, but as long as their six-month anniversary falls after this date – because that’s the milestone that matters most here – they’ll be eligible for the new entitlement.
For all other employees who completed their first six months service or reached their 12-month sick leave anniversary before 24 July 2021, the full 10-day entitlement will become available to them when they reach their next 12-month sick leave anniversary (so, 12 months after they were last entitled to sick leave).
Can you share some examples of how these entitlements might apply to different employees?
Sure! To explain this further let’s look at a couple of scenarios.
First, let’s say you have a new employee who started work on 31 March 2021; all going well, they’ll complete their six months of service with you on 30 September 2021. As this date falls after 24 July, they would be entitled to 10 days sick leave from 30 September. And on their next sick leave anniversary (30 September 2022) they’ll be entitled to another 10 days.
Now, how about an existing eligible employee whose last sick leave anniversary day was the 31 October 2020. Currently, this employee is entitled to five days of sick leave under the previous legislation. When they reach their sick leave anniversary on the 31 October 2021, they can access the new entitlement of 10 days – again, because this date falls after the 24 July 2021.
Finally, if an existing employee was entitled to five days sick leave on 23 July 2020 and their next sick leave anniversary fell on 23 July 2021, they would still only be entitled to five days sick leave. Unfortunately for this employee, their anniversary date for this year landed just before 24 July 2021 when the increasing sick leave changes were introduced. They’ll be eligible for 10 days on 24 July 2022 – their next sick leave anniversary.
One last question; do I need to communicate these changes to my employees?
It’s important to communicate the new legislative changes to your employees and explain when the new entitlements will come into effect for new and existing employees. If you’ve made changes to your leave policies, this is also a good time to let your employees know what those changes are and make sure they can access a copy of the updated policy.
If you need more information on the new sick leave legislation, there’s a helpful article here.
We hope this quick explainer provides some clarity on how to work out when each of your employees has the right to 10 days of sick leave. If you have any questions, feel free to get in touch with the team at HR Assured.
For HR Assured clients, contact our 24/7 Telephone Advisory Service.
Not an HR Assured client and need some advice? Contact us today to arrange a confidential, no-obligation chat.
Sascha Nicoll is an Employment Relations and Safety Consultant at HR Assured New Zealand. She has over 15 years of experience working in the HR industry in both consulting and in-house roles. Sascha supports business leaders on various workplace matters, including people management, health and safety, procedural development, and HRIS support.