Winning the paper war: New holiday legislation no joke

New legislation is anything but a vacation for business, says GILBERT PETERSON, communications manager for the Employers & Manufacturers Association (Northern).

Employers will face major new costs after the Holidays Act comes into effect on April 1.

In 2007, the act also introduces four weeks' annual leave.

The largest new cost area is the payment of time and a half plus an alternative day off in lieu for every person, waged or salaried, who is required to work on any of the 11 public holidays.

Two other areas of new compliance cost are the conversion of special leave into sick leave, which can now be accumulated for up to 15 days, and bereavement leave entitlement.

This latter is in two categories. Up to three days applies for the deaths of a wide range of defined relatives; one more day is allowed each and every time an employer accepts that an employee has suffered a bereavement after considering the employee's closeness to the deceased and their funeral and "cultural responsibilities".

The costs of not complying with the new law could be considerably larger; the penalties for not keeping the data required on employees' leave entitlements are fines up to $10,000 along with fines and back pay for up to six years (plus interest) if employees are not paid their entitlements.

Aside from the direct extra costs, changes have to be made to payroll management systems.

Payroll administrators will need to have their skills upgraded to cope, and payroll software systems have to be upgraded as well.

Managers will need to brush up on how the new law works.

The Employers and Manufacturers Association estimates staff training will conservatively cost on average about $300 per employer. Upgrading software will cost from about $250 for new programmes plus development costs of up to 1200 to 1500 hours at $160 an hour.

Employers have to write into all existing employment agreements with current staff their new holidays' entitlements. This includes their entitlements to time and a half for working on public holidays.

They will have the rest of this year to do this, but employment agreements for new employees have to have their time and a half entitlements included from April 1.

Employers have to attend to the problem of marrying any above-minimum entitlements with the new minimum entitlements.

Each minimum entitlement must be met but employers can provide more than the minimum.

In summary the Holidays Act 2003 is held to:

1. Provide for and protect employees' minimum entitlements to annual holidays, public holidays, sick leave and bereavement leave.

2. Provide all employees with entitlement to three weeks' annual holiday on pay after the end of each completed 12 months of continuous employment.

3. Provide 11 public holidays; where a public holiday falls on a day that would, but for the public holiday, otherwise be a working day for an employee, the employee is entitled to take the day as a public holiday and to be paid for that day.

4. Provide all employees with entitlement to five days' sick leave for each 12-month period beginning after the employee has completed either:

* six months' current continuous employment or;

* six months' work during which the employee worked for the employer at least an average of 10 hours a week and no less than one hour every week or no less than 40 hours in every month.

5. Provide all employees with bereavement leave after either:

* six months' current continuous employment or;

* six months' work during which the employee worked for the employer at least an average of 10 hours a week and no less than one hour every week or no less than 40 hours in every month.

6. Requires employers to keep staff holiday and leave records.

7. Cannot be contracted out of but the minimum entitlements may be improved upon.

8. Give labour inspectors special powers and the right to determine specified matters where an employer and employee cannot agree.