Holidays Act vs Employment Leave Bill NZ
Whether the Employment Leave Bill is good news depends almost entirely on how you work, and the headline summaries do not tell you which group you are in. Three things move at once. Leave starts accruing from your first day instead of after twelve months for annual leave and six months for sick leave, which is a clear gain for anyone whose jobs are short or whose employment is seasonal. Leave is measured in hours rather than weeks or days, which removes the ambiguity that has driven twenty years of payroll remediation and leaves regular full-timers roughly where they were. And sick leave becomes proportional to hours worked rather than a flat ten days for everyone, which is a real reduction for part-timers. This comparator applies all three to your own pattern and says plainly which way each one moves you.
Point by point
Green rows are where the proposal improves your position, red rows where it worsens it.
| What | Holidays Act 2003 | Employment Leave Bill | Direction |
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The gain nobody disputes is timing
Under the Holidays Act 2003 annual leave becomes available after twelve months of continuous employment, and sick leave after six. Anyone who changes jobs frequently, works seasonally, or is employed on fixed terms shorter than a year can spend a working life without ever reaching either threshold. Under the Bill both accrue from the first day. For a nine month fixed-term worker that is the difference between no sick leave at all and a balance that builds from week one, and it is the change most likely to matter to the people currently worst served by the system.
The loss is concentrated on part-time sick leave
The current ten day sick leave entitlement is flat: every eligible employee receives it regardless of how many hours they work. That is generous to part-timers in a way that is hard to justify from first principles, since a day of sick leave for a two-day-a-week employee covers a much larger share of their working time than for a five-day employee. The Bill makes sick leave proportional to hours, which is more internally consistent and leaves part-timers with fewer hours of cover. Measured in days at their own shorter day the reduction looks small, which is why it has attracted less comment than it probably deserves.
Casual work changes shape rather than size
Casual workers currently receive 8 per cent holiday pay with each pay and, in most cases, no practical access to sick leave because the eligibility test is hard to meet on irregular hours. Under the Bill they receive a 12.5 per cent leave compensation payment covering both annual and sick leave. That is more cash per hour worked and no accruing balance at all. Whether it is an improvement depends on whether the worker would ever have qualified for sick leave under the current test, and for many genuinely casual workers the honest answer is no.
Worked example
A regular part-time employee works 20 hours a week over 3 days, so their working day is 6.7 hours. Under the Holidays Act their ten days of sick leave is worth 66.7 hours of cover. Under the Bill they accrue 0.0385 hours per standard hour, which across a 1,040 hour year is 40.0 hours, a reduction of 26.6 hours.
Annual leave is unchanged at four weeks equivalent, 80.0 hours either way. Against that, both entitlements now start on day one rather than after six and twelve months. This pattern is therefore mixed: clearly worse on sick leave quantum, clearly better on when the entitlement begins.
How this is calculated
Under the Holidays Act, annual leave is four weeks of your usual week, so four multiplied by your weekly hours, and sick leave is ten days of your usual day, so ten multiplied by weekly hours divided by days a week. Under the Bill, a year of standard hours is your weekly hours multiplied by 52, annual leave is that figure multiplied by 0.0769 and sick leave by 0.0385, with sick leave capped at 160 hours. For casual patterns the Bill substitutes the 12.5 per cent leave compensation payment for both accruals, against the current 8 per cent holiday pay, and the comparison is shown in money rather than hours.
Official sources
- Holidays Act 2003, legislation.govt.nz
- Holidays Act reform: Employment Leave Bill, MBIE
- Employment Leave Bill 2026, Employment New Zealand
- Leave and holidays, Employment New Zealand
Related NZ calculators
- Hourly Leave Accrual Calculator for your balance under the Bill
- Leave Compensation Payment Calculator for casual and additional hours
- Annual Leave Cash-Out Calculator for cashing up under both systems
- Annual Leave Calculator for your current entitlement
- Sick Leave Calculator for the current ten day entitlement
This page explains how the law works and estimates figures from what you enter. It cannot tell you what will happen in your situation, because employment outcomes turn on facts, evidence and the wording of your own agreement. Nothing here creates a lawyer and client relationship.
It has not been reviewed by a lawyer. The legal descriptions are drawn from Employment New Zealand, MBIE and Inland Revenue and were checked against those sources on 7 August 2026. They are our reading of published guidance, not a practitioner's opinion, and parts of this area are very new: the Employment Relations Amendment Act 2026 has been in force only since 21 February 2026 and there is little case law on how it will be applied.
Half of this comparison describes a Bill that is not law, and transitional arrangements for existing balances are not settled. Do not plan around a conversion.
Before you act, get advice. A community law centre is free. Employment New Zealand provides free information and mediation. An employment lawyer will tell you things no calculator can. Time limits are short and unforgiving: a personal grievance must generally be raised within 90 days, so seek advice early rather than waiting for certainty.