Retail NZ says most retailers are broadly supportive of the Employment Leave Bill currently before the select committee but have reservations about the proposed 12.5% Leave Compensation Payment.
Chief Executive Carolyn Young says the organisation has carried out extensive consultation with members on the Bill, which is designed to streamline and modernise New Zealand’s leave system.
Young said retailers “strongly welcome” the intent of the legislation and the improvements it introduces to the Holidays Act.
“Moving to leave accrual in hours and a simpler, more consistent way of calculating leave payments will substantially reduce the compliance burden for retailers. These changes are long overdue, with businesses of all sizes struggling with the complexities of the current leave requirements.”
However, Retail NZ’s submission to the select committee raises concerns about the proposed 12.5% Leave Compensation Payment for casual employees and permanent staff undertaking extra hours.
“After several years of challenging economic conditions, rising costs and tight margins, many businesses simply do not have the capacity to absorb a significant increase in wage costs.”
“For some employers, this 12.5% payment risks their viability and discourages flexible work arrangements.”
Retail NZ is calling on the Government to consider reducing the proposed LCP rate to a level more closely aligned with what would typically be accrued through sick leave and annual leave entitlements.
Young said the organisation supports a leave system that is fair, clear and practical for both employers and employees and believes the Bill’s core reforms are a step in that direction. However, she said the final legislation needs to strike a balance between employee protections and the operational realities facing retailers.