Holidays Act Changes
The Minister for Workplace Relations and Safety has announced that an exposure draft of a Bill to reform the Holidays Act will be released for targeted consultation in September 2024. The Government has agreed that this exposure draft will include some changes and additions to the previous Government’s decisions on the Holiday Act's reform.
An exposure draft is a preliminary version of a Bill released by a government agency for public consultation before its introduction to Parliament. This process is different from the public consultation conducted by a Select Committee after a Bill is introduced.
The primary focus of the changes is to simplify calculations and reduce implementation costs for employers. The exposure draft will include:
- A proposed approach to pro-rating sick leave to reflect the proportion of hours an employee works.
- Transitioning from a weeks-based entitlement system to a weeks-based accrual system for annual leave.
- Simplified methodologies for calculating leave that do not require pay systems to access data on daily work hours.
- Objective criteria for using pay-as-you-go for annual leave and a streamlined review process.
- Clarification that only full pay periods need to be included in 13-week reference periods.
Read the Minister’s announcement: Progress for fixing the Holidays Act 2003.
The purpose of the targeted consultation is to test the technical and policy details of the Bill with stakeholders. Based on the feedback received, the Government may make further changes before introducing the Bill to Parliament.
Get Involved with Consultation
MBIE is inviting stakeholders with expertise in implementing the Holidays Act in payroll and business systems or understanding its impacts on employers and employees to participate in the consultation. This includes employers and employees from various business sizes and working arrangements, payroll providers, practitioners, and legal experts.
Participation Details
In September 2024, MBIE will send consultation participants the exposure draft of the Bill, a consultation document, and a response form for feedback.
The consultation document will explain each area of the Bill and include targeted questions to test the policy and technical details. Feedback on implementation requirements and compliance costs of the proposed changes is also sought.
Next Steps After Registration
Participants will need time to review the Bill and prepare feedback. In early August 2024, those who register interest will be contacted with more information on the next steps. Depending on interest levels, a representative sample of stakeholders may be selected for the consultation to ensure all feedback is reviewed and considered.
Register your interest by 8 July here.
Employers’ Obligations Remain
Until changes to the Holidays Act are enacted, all existing rules still apply. Employers must comply with the current Holidays Act, ensuring correct entitlements and payments to employees. Employers also remain responsible for rectifying any historical underpayments due to non-compliance with the current Act.
Read more about leave entitlements under the current Holidays Act here.