Hours-based accrual is the way to go

Brooke van Velden announced:

Workplace Relations and Safety Minister Brooke van Velden says she has directed her officials to change the proposed direction of Holidays Act reform.

“The Government recently conducted targeted consultation on an exposure draft Bill which built on work that had started under the previous Government. The feedback I have seen indicates that the draft Bill is not going to solve the issues of the Act,” says Ms van Velden.

“Not only have I heard from submitters that further simplification is possible, but there were some who believed that what we put out for consultation was more complex and had higher compliance costs than the legislation we have now.

“I want to get this right, and I have always said that this consultation would be genuine. It has become clear that a fundamental change is required to give employers and employees the simplicity and certainty they have been calling for. 

“I have listened to the feedback and have asked officials to begin work on an hours-based accrual model for annual leave.

An hours based system would be much much simpler.

Basically if you work 40 hours and get four weeks annual leave then you would accrue 3.2 hours. You have a running balance of hours, and as you take leave they go down, and if you leave you get paid out.

It wouldn’t matter what pay rate you were on when you earnt them – you just get paid the rate you are on when you take them. This is in fact how many employers already operate – but technically they are breaking the law.