What's changed since this article was first published?
The increase from 5 to 10 sick days took effect in July 2021 as planned, so if you updated your employment agreements and payroll system at the time, that part is sorted.
The bigger development since then is that the Government is now working on a full replacement for the Holidays Act 2003 - the law that governs sick leave, annual leave, and public holidays.
The current Act is known for being complex and easy to get wrong, so the reform has been a long time coming. Until the new legislation is passed and comes into force, the existing rules still apply. You can follow the progress of the reform on the MBIE website.
The following article was published in June 2021 - information may have changed since then.
New sick leave entitlement
With winter rapidly approaching and the continued effect of Covid-19, it is timely that sick leave entitlement will increase from 5 to 10 days. The Holidays Amendment Bill has now been passed in parliament and will take effect from 24th July 2021.
Here are some details you will need to know as an Employer.
Currently
All employees who meet the requirements are entitled to a minimum of 5 sick days every 12 months.
20 days is the maximum an employee can accumulate; the employer can agree to give more.
Note: Sick leave is not pro-rated; for example, an employee who works one day every week is entitled to 5 sick days.
What you need to know
Employees will get the extra five days when they reach their next entitlement date – either after reaching 6 months’ employment or on their sick leave entitlement anniversary (12 months after they were last entitled to sick leave).
Employees who already get 10 or more sick days a year will not be affected by this change.
The maximum amount of unused sick leave that an employee can be entitled to will remain 20 days.
Source - employment.govt.nz/news-and-updates
What action should you take?
Check how your payroll software provider will manage the changes
Amend any new employment agreements to show 10 sick leave days
Talk to your employees to make sure they are aware of the changes
About the author
Karyn Campbell is a New Zealand payroll consultant and founder of Payroll Consult. With 5+ years running her own consultancy and a background in payroll software – including roles across client support, onboarding, and partnership management at a leading NZ payroll provider – Karyn brings a rare combination of technical knowledge and real-world compliance experience. She works with business owners, bookkeepers, and payroll teams across New Zealand, specialising in payroll audits, system reviews, and fixing complex payroll issues for teams that don’t work a typical 9-5.
