Understanding the proposed changes to leave for New Zealand employees
Most employers are aware that New Zealand’s leave system is complex and often confusing. The Holidays Act can be challenging to interpret and apply correctly, and many employees also find it difficult to understand their entitlements.
On 23 September 2025, The Minister for Workplace Relations and Safety confirmed the Government’s revised approach to reforming the Holidays Act 2003. The approach aims to simplify leave entitlements and reduce compliance costs for employers.
This article sets out a summary of what we know about intended changes. It’s important to know that nothing is changing immediately – these reforms would need to go through the normal legislative process (a bill is expected to be introduced soon and be passed before the next election). The Government has said that once the law has been enacted, there will be a two-year transition period to allow for changes to pay and business systems (the schooling sector could have up to 10 years).
Preparing for the changes
Although any changes would be at least two years away, as things progress, employers may want to consider:
- Checking your employment agreements: Review leave terms to avoid granting more leave than required under the proposed changes or needing complex transitions later.
- Touching base with your payroll team or provider to confirm that systems would be able to handle the proposed changes.
- Understanding any cost impacts: Run the numbers to understand the potential financial implications of the proposed changes on employee remuneration.
- Staying informed: Monitor developments to remain prepared for change.
For now, nothing changes in relation to holidays and leave – employers should continue to comply with the Holidays Act 2003 until any changes come into force.
