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Perils of Pay as You Go Leave

A cautionary tale for those of you who have long term casual staff or fixed term employees

One of our customers was challenged by an employee regarding leave. They had been employed on a casual basis for over 12 months and been paid their 8% leave with each pay. In this situation employees are entitled to their leave as time, i.e. 4 weeks, and the leave that has already been paid is forfeit.

In addition casual staff can become eligible for Sick Leave after 6 months.

To avoid being caught in this situation either:

Employ your casual staff as part-time, then you won't get caught out, staff are paid leave when they take it, or when they leave your organisation. Or,
Check your Leave Reports as we put reports in there for casual staff who have worked over 6 months and over 12 months.

As soon as you know you will have a fixed-term or casual employee with you for over 12 months, you should renegotiate their contract and move them from pay as you go leave.

You can find out more information at www.dol.govt.nz or by giving us a call.

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