Changes to your payroll
Re MYOB, ACE, IMS, EXO, Essentials
You may have received an email from MYOB around their payrolls in relation to the Holiday Act 2003., Our holiday legislation is complex and tricky (unlike Australia). The biggest difficulty is with employees who work variable hours. People on set hours or casuals are easy to administer.
We’re looking forward to an update to all of the above payrolls to make all of our lives easier.
To summarise the changes here goes -
Employers must maintain annual leave in weeks (you currently use days or hours). You must regularly review leave setups (say once every quarter) to check that employees working patterns haven’t changed because unfortunately payroll is not something you can just “set and forget”.
FBAPS leave (family, bereavement, alt days, public & sick leave). If you have people on variable hours who have overtime, commissions, regular bonuses, you need to pay the HIGHER of the average rate (ADP) or their relevant daily pay (RDP - is what they normally earn on the day off).e.g. Debbie has Tuesday off sick. She is on the roster for 8 hours; however, every month she gets commission and she sometimes works overtime (she’s a winner!). Therefore, we cannot determine her RDP. We must use ADP if it’s higher.
Other things to think about re payroll –
If you terminate an employee and they have outstanding leave at their last anniversary date, you may need to pay upcoming stat days.
Non-discretionary payments such as one-off bonus payments should be set up so holiday pay doesn’t accrue.
When your employee’s annual holiday spans multiple pay periods (say 3 pay runs) and you are paying them as part of your normal pay cycle, you must ensure the rate of pay for the annual leave hasn’t dropped from the first pay run.
If you close down at Xmas, it’s better to enter the pays one-by-one rather than do a single pay covering 3 weeks. Your leave rate mustn’t go down.
*Parental leave is very tricky. Not all payroll’s do this automatically. You may need to manually calculate the rate to pay employees. Best to pay employees their annual leave before they go on parental leave.
To sum up:
We doubt any payroll in NZ is completely compliant. Some areas of the Holiday Act and other legislation can’t be programmed. With 50 pieces of legislation around payroll you have a right to feel confused.
If you want to learn more and read about the changes coming to your payroll click here Holidays Act Hub
If you require a WOF on your payroll please contact us to discuss your needs..