Time away from work is vital for the health of your employees — so it’s vital for the health of your company too. Time off not only reduces stress, it has been shown to improve productivity once employees return to work.
You can also:
Raul owns a kayak touring company in Nelson. Rachel, one of his best guides, has asked for two weeks off to attend her brother’s wedding in London. It’s in January — the height of the tourist season.
He looks into leave entitlements and finds he doesn’t have to grant Rachel’s request if the timing doesn’t suit the needs of the business.
Raul turns Rachel down, but says she can take two weeks off over winter to visit her family. Rachel resigns, telling Raul she can’t miss her brother’s wedding. When she returns from London, she goes to work for a rival company.
Raul loses a number of his repeat clients, who say they miss Rachel. Raul has stayed on the right side of the law, but has lost a valuable employee. Replacing her will take time and money, and he may never win back his lost clients.
If an employee doesn’t have set hours, you can decide with them what four weeks' leave means and record this in their employment agreement (this should be continually updated).
Casual workers with no set hours can agree to be paid an extra 8% of their gross pay instead of accruing any annual leave.
This must be written into their employment agreement, and the 8% holiday pay should appear as a separate and identifiable amount on their pay slip.
The same applies to workers on fixed-term contracts of less than a year, as they are not expected to still be working for you on the date they’d otherwise qualify for annual holidays.
If you have an annual closedown, eg the office or workshop is closed over Christmas and no one works, your employees have to take time off even if they don't have any annual leave.
You have to give 14 days' notice of the closedown. Employees must:
If the closedown period includes any public holidays, you need to pay your staff for them if they fall on days they’d usually work.
In November, Simon bought a factory with an annual Christmas/New Year closedown. As required by law, Simon gives his employees more than 14 days’ advance notice of the closedown dates. He also calculates their holiday pay, and checks he’ll have enough incoming cash flow for the post-closedown pay round.
But employees are legally entitled to be paid for holidays before they take leave. This is to ensure they aren’t left out of pocket by holiday expenses.
In a panic, Simon realises he doesn’t have enough cash flow to pay his employees before the holiday period. He uses money from his personal bank account, and realises he must budget in future to pay his employees before they take holiday leave.
Here’s what you should do for these new employees: