24 September 2025

Plans to simplify and modernise New Zealand’s leave system will make it fairer and more workable for both employers and employees, Retail NZ says.

Retailers will welcome today’s announcement by Workplace Relations and Safety Minister Brooke van Velden that a new Employment Leave Act is set to replace the Holidays Act 2003.

“The move to hours-based accrual for annual and sick leave, and the ability for leave to be taken in hours rather than days, will significantly reduce complexity and compliance costs for retailers, especially SMEs”, Retail NZ Chief Executive Carolyn Young says.

“Proportional sick leave for part-time workers and a single, clear method for calculating leave payments are also positive steps that will benefit the retail sector, where flexible and part-time work is common.”

Retail NZ also supports:

• Leave accruing from day one for all employees, including bereavement and family violence leave, which better reflects real-life circumstances.
• Removal of leave accrual during ACC or unpaid leave, which aligns entitlements with time actually worked and reduces undue cost pressures on businesses.
• A clearer method to calculate leave entitlements relating to public holidays.

However, Retail NZ has concerns about some of the proposed changes, including the proposed increase in Leave Compensation Payment (LCP) for casual employees from 8% to 12.5%, and the move to pay annual leave at the full regular rate immediately after parental leave.

These proposals risk unnecessary cost increases for businesses, especially SMEs, without clear justification, Ms Young says.

Retail NZ looks forward to engaging further during the Select Committee process to ensure the new legislation delivers a balanced outcome for both employers and employees. We are committed to working with Government to ensure the new Act is practical, fair, and supports the ongoing success of New Zealand’s retail sector.

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