Holiday pay has been in the news recently and we know the Labour Inspectors from the Ministry of Business, Innovation and Employment will be checking that other employers have been recording and paying entitlements correctly.
There are two ways of calculating holiday pay:
- it can be based on ordinary weekly pay at the beginning of the holiday; or
- average weekly earnings over the previous 12 months
The correct amount of holiday pay is whichever figure is the greater.
Where employees are permanently employed on a constant work pattern, working out their entitlement is easy.
If you have employees working irregular hours, it can be tricky to ensure their entitlements are correct.
It is vital to make sure your systems are set up to record all relevant information and that your payroll system uses correct formulas and definitions.
Contact us if you would like more information about this.
