Payroll gurus - Sick and annual leave

When I went on Mat leave I didn't accrue any leave as I wasn't "working" that was over 6 years ago so unsure if anything has changed now.

Hi C & J ,

Yes you do accrue annual and sick while on maternity leave. However when you return to work the law provides that the employer pays annual leave at your 52 week average earnings. That means that if you take a whole year off, you come back to accrued leave, but it has zero value because you did not earn anything in the previous 52 weeks. Or if you took say 3 months off, then the leave rate is worked out by your total earnings for the previous 52 weeks divided by the number of hours you have worked. So the leave will be at a lower rate of pay, until you've been back at work for 52 weeks. Sick leave is different, it is paid at the average of your last 4 weeks earnings. So if you went back to work and had a sick day in your first week back, it would have no value. But if you had been back for 4 weeks, it would be at your full rate.

Hope I explained it okay - its really confusing.

From what my HR tells me you do - but you should also use up your DIL, Sick days and Annual leave BEFORE starting maternity leave, as while you are away on maternity leave you are not earning, so the rate of pay would be reduced.

caliandjack wrote: What is DIL?

Days in Lieu (at a guess)

Some also choose too pay it a full rate IF you return to work as part of there parental leave package.. mine did so when I was made redundant my leave was paid out as at my last day of employment not when I went on maternity leave (as it would have been had I resigned before returning to work)...

Though that wont apply to your CJ but it does pay to check your contract

Day in Lieu, yes :)

My understanding susyl is you accumulate leave however it is based on your average earnings for the preceeding period. As you would have been on maternity leave those earnings would have been zero. So holiday pay paid to you would effectively be zero.

I was more interested in what happens with sick leave, as that doesn't get paid out anyways and I didn't want to go on maternity leave and then resign (as that's what I'll be doing anyways) owing work 1 days sick leave.

I am the payroll person! I only get 5 days sick leave per year and I've used all of those.
They already know I'm not returning as I'm moving to Akl in a months time, the only reason I'm not formally resigning is so I can still get PPL.  As any remaining AL will be paid out to me between when I finish work and start maternity leave.

Gosh these things can get confusing!

The Employment Relations Service website is one of the best resources. Sometimes you have to jump around a bit to get your answer but I've generally found it a really good source of information.

Check it out at www.ers.govt.nz

I followed a link from there to the Department of Labour website which had the following:

"if an employee becomes entitled to annual holidays while they are on parental leave or in the 12 months following any parental leave, the calculation changes. The payment amount will then be determined by calculating only the employee's average weekly earnings for the 12 months immediately before the end of the last pay period before the annual holidays are taken"
(http://www.dol.govt.nz/workplace/knowledgebase/item/1260)

I read this to mean that if you take your one year of parental leave that you are still entitled to four weeks but if you took one day as soon as you returned to work you would be paid virtually nothing but the amount you would be paid would increase over time until it reached your average weekly earnings. However, it only discusses if you are taking the annual leave, not having it paid out because you are resigning - the situation may be different in that case which means it may also be different for sick leave - I personally wouldn't count on accruing that time if I wasn't going to be returning to work.

caliandjack - If it was me, I would transfer some of my annual leave to cover the sick leave in arrears if you still owe some when you leave.