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What is Holidays Act compliance and remediation?

Like many public and private organisations across New Zealand, the 3DHBs across the Wellington Region are impacted by Holidays Act 2003 compliance issues.


The Holidays Act 2003 covers pay and entitlements for employees in New Zealand about all types of leave and public holidays. While it’s easy to follow for those working standard hours, the Act has proved more complex for employees on shift work, variable days and hours, or with flexible work patterns.

This has resulted in widespread non-compliance – essentially, employers have unintentionally been underpaying or overpaying staff what they’re entitled to.

Since this came to light in 2015, it has affected a wide range of private and public organisations, including all district health boards.

The three Wellington regional DHBs – Wairarapa, Hutt Valley and Capital and Coast – have identified some payroll-related issues. This has resulted in some staff receiving incorrect payments over time.

The issues relate to entitlements under the Holidays Act 2003. The specific areas requiring remediation date back to 1 May 2010. The issues are mostly related to the payment of statutory holidays, and annual, sick and bereavement leave etc.

In late 2016, DHB chief executives agreed to establish a national process to respond to concerns raised by the Council of Trade Unions (CTU), around levels of compliance of DHB payroll systems with the Holidays Act 2003.

As well as development of a national process to manage Holidays Act Review and Remediation work, much work has been done to develop and agree a national interpretation of the Act for all DHBs to adhere to.

Are other organisations and other DHBs affected?

We are in communication with the Ministry of Health, TAS and other DHBs working through similar issues to ensure that we use National guidance and take a consistent approach to becoming more compliant.

Yes. A number of both public and private sector employers in New Zealand are also impacted. Like us they are working hard to resolve this issue.

What does this mean for you?

Right now you do not need to do anything. We will keep our current staff up to date. However, it should be noted that not everyone is affected. Holiday pay was calculated and paid correctly for many staff members.

Once we have rectified the system and any other areas in which we are non-compliant, we will look at Holiday pay calculations back to 1 May 2010, for both current and former 3DHB staff

What is the agreed solution between DHBs and the unions?

The agreed solution between all DHBs and unions is to proactively make remediation payments to current and former employees to adjust for incorrect calculations going back to May 2010, and for future payments to be calculated and paid correctly.

What is the process?

Each of the 3DHBs will need to carry out three key phases to manage this issue.

The stages are:

  1. 1.Reviewing the scope of the issue.
  2. 2.Rectifying any issues found in the review stage: The rectification process will look at our end-to-end payroll system and any improvements or changes we need to make.
  3. 3.Remediation. It is only at this stage that we will look at who has been affected and make any necessary payments to affected staff.

Currently all the 3DHBs are nearing completion of the review stage and moving to the rectification stage.We are currently working out how big the issue is, how many staff across the three regional DHBs may be affected and what the timeframes will be for the remediation process.

Where are the 3DHBs up to in this process?

All the 3DHBs have completed the first phase and are now in the pre-rectification planning phase.

What about former employees?

Former employees will be able to register their contact details at a specifically established national website to ensure the DHBs have their most up-to-date contact information. This will make it easier for the 3DHB’s to contact them should they be owed money. That website will be well publicised and a link will be placed on this page, as soon as it is available. It will include FAQs for ex-employees.

Note: The review of payments goes back to 1 May 2010 only.

Current 3DHB employees do not need to register on the national registration website. You will receive information both here and directly. This will notify you of progress and about anything you need to do.

When will I know if I have money owed to me and how much?

It will be a number of months before we are close to the point of knowing which employees have been affected and what level of payments may be due. It is absolutely vital that we get this right, and the complexity of achieving this is significant.

Will I have to pay money back?

If there have been overpayments, it is unlikely that action will be taken to reclaim those funds. The emphasis is on paying out what people are owed.However, this process will help us to identify where we may be overpaying people, and we will correct this moving forward.

Current status (as at July 2020)

The Review Phase is now complete and Audit reports have been produced, by Ernst Young (our independent external auditors), for all 3DHBs.

We are currently planning phase 2 and work will start shortly on rectifying systems and processes.

More information

We will provide updates to this page as we move through the project phases, so please come back to see how we’re getting on.

If you have any questions email our 3DHB Holidays Act Project team.