A major change to New Zealand’s employment laws could see workers paid more immediately for extra hours, but it could also mean they build up less leave over time.
The proposed Employment Leave Bill would replace the current Holidays Act and introduce a new approach to how workers are compensated when they work beyond their normal hours.
The biggest talking point is a new 12.5 percent payment for additional and casual hours.
Under the proposed system, workers would still receive their normal wages for any extra hours they work. On top of that, they would receive an additional payment equal to 12.5 percent of their hourly pay.
For example, a worker earning $30 an hour who works an extra 10 hours would receive their usual $300 in wages, plus an additional $37.50 payment.
The reason for the extra payment is that those additional hours would no longer count towards building up annual leave.
The Government says the change will make the leave system easier to understand and easier for businesses to manage. It argues the current Holidays Act has become too complicated, leading to confusion and costly payroll mistakes.
But opponents say the change could disadvantage workers who regularly work extra hours.
They argue that extra money in a pay packet is not the same as having paid time off available when someone needs a break, takes a holiday, or becomes sick.
The issue could be particularly important in areas like the Manawatū, where many industries rely on workers working extra hours during busy periods.
In farming, manufacturing, retail, hospitality and other sectors, it is common for employees to work longer hours at certain times of the year. Under the proposed changes, those workers would receive the extra payment at the time they work, rather than building up more leave to use later.
Labour has criticised the proposal, saying workers should continue to earn leave based on all the hours they work. The party says the change could leave people with less access to paid time off, particularly those in jobs where hours are not always predictable.
The Green Party has also opposed the bill, saying it could hit part-time and casual workers hardest because they are more likely to rely on changing hours.
Supporters of the bill argue the new approach is more straightforward. Instead of employers having to calculate leave entitlements across different types of working arrangements, the extra payment would be made at the time the additional hours are worked.
The Education and Workforce Committee has recommended the bill be passed, but has suggested several changes before it becomes law. The committee received about 660 submissions from individuals and organisations during its review.
The bill still has further stages to go through Parliament before it can take effect.
For local employers, the change could mean reviewing payroll systems and employment agreements. For workers, the key question is whether they would prefer receiving extra money immediately for additional hours or continuing to build up leave that can be used later.
Either way, the proposed changes could reshape the way New Zealanders think about overtime, extra shifts and paid leave.
With many businesses already facing pressure from rising costs and staff shortages, and many workers relying on extra hours to boost their income, the debate over the new system is likely to continue well beyond Parliament.