and Annual Leave
With the end of year holidays upon us, we thought it would be a good time to talk about annual. We all need a good holiday once in a while especially when we've been working so hard all year long.
Hospo workers have it pretty hard when it comes to annual leave. At the end of the year when most people are on holidays enjoying food and drinks in cafes across the country hospo staff are sloggin’ it out working crazy shifts just to keeps us happy, feed and with beautiful images for our Instagram accounts. Unless you’ve worked in hospo you just don’t know all of the challenges these workers face.
So when it comes to taking leave how can you (if you work in hospitality) ensure you are receiving the correct entitlements.
First let’s look at leave entitlements in Aotearoa New Zealand.
All workers are entitled to both public holidays and annual leave.
All workers are entitled to receive a minimum of 4 weeks of annual leave for every year of conscious work with the same employer. This assumes that you work a predictable pattern of work every week. With the proper amount of notice ( this will depend on your employer and your employment contract) you will generally be able to take up-to 2 weeks of annual leave at a time.
If you work part time then your annual leave will be calculated based upon what a typical working week looks like for you. So say you worked 3 days a week then you will be entitled to 12 days of annual leave.
In hospitality it may be difficult to get time off for annual leave during the summer period as this is generally going to be the peak busy time for your employer and an opportunity for you as a hospo worker to earn more money by working more shifts. This means that unless you have agreed to taking time off with your employer with the correct amount of notice (refer to your employment contract) you will likely have to work.
Hospo Workers and Annual Leave
Because of hospo workers ever changing shifts, varying hours and pay week to week it can be difficult to correctly workout your entitlements. Turns out this is not just anecdotal, as it has been shown that a large number of employers in the hospitality industry have not been meeting their legal obligations through incorrectly paying their employees their correct entitlements or purposefully neglecting others.
As we already mentioned your employer is required to provide you with 4 weeks of annual leave for each consecutive year that you are employed by them. If you are lucky enough to get more than this through your employment, awesome, just make sure you never agree to less. It’s illegal.
How much leave am I entitled to?
Annual leave is always calculated in weeks. Many employers have, and still do, calculate annual leave in hours. This is illegal and poses many issues. The reason for the calculation being done in weeks is that it will determine the correct amount you need to be paid while you are taking off for annual leave.
Your employer will need to calculate your average weekly earnings and your ordinary weekly payments. Once they these amounts they will need to pay to you while you are on annual leave.
Average Weekly Payment (AWP)
Average weekly earnings are worked out by calculating your gross earnings over the 12 months prior to the end of the last payroll period before the annual holiday is taken, and dividing that figure by 52.
Your gross earnings include all payments that your employer is bound to make under the employment agreement or legislation. In hospo this includes things such as; allowances, overtime, payment for annual and public holidays, sick and bereavement leave taken plus any other payments that are required to be made under the terms of the employment agreement.
12 month gross earnings
Ordinary Weekly Payment (OWP)
To work out ordinary weekly pay - use the OWP formula - go back to the last pay period before the annual leave is taken and then go back 4 weeks (or length of pay period) from there, work out gross earnings (minus anything not in OWP) and divide by 4. You might use the OWP formula if there is a payment made regularly but the amount of the payment varies.
(gross earnings - any one off or irregular payments)
Cashing up annual leave
Every worker is entitled to exchange one weeks worth of annual leave for cash once a year for every 12 months of consecutive work they have done for the same employer. Only you can choose when or even if to exchange any leave for cash. If your employer tries to encourage you to do so just remember that they legally cannot do this.
When can I start to use my annual leave?
Although your entitlement to annual leave starts once you have worked for 12 consecutive months, the majority of employers these days will allow you to start to take your annual leave before you complete your first 12 months of employment.
Once you have completed this first 12 month period you should be able to start requesting annual leave whenever you want and your employer may only refuse you on specific and reasonable grounds. This could be the example set out earlier where it is the summer period and they are having a hard time employing extra staff because of the COVID-19 mandates.
Can I be forced to take annual leave?
If your employer closes down for any part of the year where staff are not required to be present then they can require you to take annual leave during this time.
If you are accumulating a large amount of leave and it is becoming a liability to your employer then it is possible that they can require you to take annual leave.
In either situation your employer will need to give you a minimum of 14 days notice.
These are the only times that your employer can require you to take leave. Even if the city you live in found itself in a serious lockdown situation because of COVID-19 you can not be forced to take any annual leave. They are still required to pay you as per your employment agreement.
If your employer has forced you to take any annual leave because of these lockdowns, get in touch with us to have a chat.
This information is guidance only, is not legally binding, and should not be substituted for legal advice or for the wording of the Holidays Act 2003.