MANAGING CHRISTMAS SHUT DOWNS, AND CHANGES COMING TO THE HOLIDAYS ACT IN 2026
Christmas is fast approaching, so if you’re an employer, it’s time to make sure your business is ready for the holiday period, so you can avoid Holidays Act headaches. Speaking of which, there are major changes coming to the Holidays Act in 2026, and you can read about these below too.
But for this year, here are the key points that trip employers up come December and January.
1. Give plenty of notice.
If your business closes over Christmas, you must give employees at least 14 days’ notice. It’s best practice to give more notice and confirm how much annual leave staff will need to cover the shutdown.
2. Not enough annual leave?
If an employee doesn’t have enough leave, you can agree to annual leave in advance – just make sure the agreement is clear and in writing, including how it affects next year’s entitlement.
3. New employees (less than one year’s service).
You must pay 8% of their gross earnings up to the closedown date, and move their next anniversary date to the day the closedown starts. This means when the next closedown comes around, the employee will get their four week entitlement.
Tip: Double-check your payroll setup for public holidays that fall within the closedown to avoid confusion (and complaints) in January.
Changes Coming to the Holidays Act in 2026
Amendments are coming to the Holidays Act, with the new law expected to pass next year and come into force 24 months later. The changes aim to simplify payroll for small businesses, make entitlements clearer, and remove unfair leave accrual while on ACC.
Key proposed changes include:
- Annual leave will accrue in hours, not weeks as it does currently (0.0769 hours for every hour worked).
- If an employee’s work hours change, it will not affect accrued leave already banked.
- Leave will accrue while on paid leave, parental leave, jury service or volunteering, but not during ACC or unpaid leave.
- Employees will be able to cash up 25% of their annual leave balance as at their last employment anniversary.
- There will be a new “ordinary working day” test for public holidays, based on whether the employee has worked 7 of the last 13 weeks on that day. For example, if you’ve worked 7 Mondays of the last 13, a Monday public holiday will be an “ordinary working day” for you.
There is some way to go in the law-making process, but you can start getting ready now. Do you have a system for keeping leave records accurate, and are they up to date now? Can your payroll system handle leave in hours?
We will keep you informed when the bill is passed into law.
How can we help?
WRMK Lawyers has Northland’s largest team of employment law specialists. We help our clients with all their employment processes. If you’d like advice on managing holiday pay, shutdowns or the upcoming changes, please get in touch with our experienced employment law team.
WRMK Lawyers takes all reasonable care to make sure that the information in this article is up-to-date and accurate at today’s date. It is necessarily general information and not intended as legal advice to be relied upon.
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