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Thelma French & Associates HR advice & consulting

Holidays for employees who haven’t worked 12 months

Wed Nov. 1st 2017

We recommend that you review holiday entitlements for your team.

If an employee has not worked for 12 months they will not yet be entitled to paid annual leave. However, if you have a closedown period, they will be entitled to 8% of their gross earnings, less any amount paid to the employee for annual holidays taken in advance.

This can place financial hardship on some employees and our experience is that sometimes kind hearted business owners let the employee take paid annual leave in advance of their entitlement. If you are proposing to do this, we strongly recommend that you get the employee to sign an undertaking confirming that, should they leave for any reason, they will repay the money or it can be deducted from their final pay. The employee will then have given written consent, as is required by section 5 of the Wages Protection Act 1983, but the employer will still need to consult with the employee prior to making a specific deduction from their final pay for holidays taken in advance.

If you require a template for this important document, please contact us.

I have used Thelma’s services many times over the years from both a consultative and combative point of view. The advice she gives is always robust, clear and concise, focused on outcome. Her advice has always proved to be beneficial and without any reservation she is my first port of call when it comes to HR advice and employment issues.
GM, Multi-National, Auckland
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