Holidays Act remediation
We’re addressing payroll system non-compliance issues relating to the Holidays Act 2003 to ensure all current and former MFAT staff receive their correct leave entitlements.
If you were employed by us at any point since July 2010 and paid through the Ministry’s Wellington-based payroll system, your leave and final pay may not have been calculated and paid correctly.
Complete the form below to help us check if you're affected, and email it to HolidaysAct@mfat.govt.nz.
We’ll confirm your details and let you know whether or not a payment is due to you, and what the next steps will be.
Form - former MFAT employee [XLSX, 13 KB]
If you have any questions or issues with this form, email us at HolidaysAct@mfat.govt.nz.
To check if a deceased person’s estate or someone you act for is due a remediation payment, you’ll need to verify your identity and provide documentation confirming you are authorised to act on behalf of the estate or person.
Complete the form below and return it with relevant documentation to HolidaysAct@mfat.govt.nz.
Form - on behalf of former MFAT employee [XLSX, 13 KB]
To pay you, we first need to confirm and verify your information, which will take us some time.
Contact us using the form above as soon as possible so we can confirm if you're affected, verify any changes to bank account details or tax code, and arrange payment to you.
We can only make payments to a New Zealand-based bank account.
We encourage you to contact the relevant organisation such as Inland Revenue for advice about whether your remediation payment affects any agreement you have with them about your current earnings, benefits, child support or any other matters.
The Inland Revenue website has useful information on the tax treatment of lump sum payments such as an arrears payment here (external link).
You can also contact the IRD directly on 0800 227 774.
As well as remediating any historical holiday pay entitlements, we have a specialist team working to rectify issues with our payroll system to ensure it is fully compliant with the Holidays Act and that our people are paid correctly.
We’ll update this page as we go, so come back for further details.
Email us if you have any questions at HolidaysAct@mfat.govt.nz.
We update our FAQs regularly. If you have any further questions please email HolidaysAct@mfat.govt.nz
What is the Holidays Act?
The Holidays Act 2003 sets out how payment for leave and final pays are to be calculated and paid. The Act came into effect in April 2004.
What is the issue?
Compliance issues with the Holidays Act are common in both the public and private sectors because many payroll systems have not aligned with the Act. So, like many other organisations, the Ministry’s payroll system does not calculate a person’s holiday pay accordingly. That means that some people’s holiday pay may have been calculated incorrectly. We are working to fix this by calculating and making remediation payments to anyone who has been incorrectly paid.
How far back will remediation payments go?
We are required to go back six years from the date of a claim or six years from the date the Ministry became aware of the Holidays Act issues. The Ministry became aware of potential issues in mid-2016. Therefore, calculations will start from the beginning of the first pay period in July 2010. Other agencies with similar issues have also gone back six years.
Will all staff receive remediation payments?
About 80% of staff that were employed by the Ministry and paid through the Wellington payroll system any time since July 2010 are due a remediation payment. Typically this has affected staff who have received payments over and above their normal salary, such as allowances or benefits.
If staff are entitled to remediation payments, how much will it be?
The amounts will vary depending on the circumstances for each individual staff member e.g. their length of service and allowance payments during the period.
Has anyone been overpaid?
Yes, however, in line with other government agencies and after consultation with Unions, the Ministry’s SLT has decided there will be no routine action to seek recovery of overpayments.
If staff are entitled to remediation payments, when will they receive them?
We need to finalise and confirm calculations before any remediation payments are made. You will be advised once calculations are complete, your documentation has been checked and verified and we are ready to make payment to you how much your remediation payment will be and when payment will be made.
Are staff employed who were employed at post included?
Only staff that were paid through the Wellington payroll system are impacted. Staff that were employed at post are not affected because they were not paid through the Wellington payroll system and are not covered by New Zealand legislation.
Is the Ministry engaging with Unions?
Yes, the Ministry is engaging with Unions. As we have agreed in the Collective Agreement, the Ministry will involve Unions in decision-making on matters affecting employees as much as practical, and act in the spirit of partnership. We have sought Unions’ views on the approach we have taken, and welcomed ongoing input to make sure we identified and resolved project challenges and issues along the way.
What other agencies are affected?
Many public and private sector employers in New Zealand are impacted and are working to resolve system issues with compliance. We are in communication with State Services Commission and other agencies working through the same issue to ensure we are compliant and consistent with guidance and the approach being taken across the sector.
How long has the Ministry known there were issues with the system?
The Ministry became aware that there were issues with the Wellington payroll-system’s compliance in mid-2016, and since then have:
- engaged with the State Services commission to receive guidance
- verified the issues in 2017
- established a project and project team to look into the issues and make recommendations to SLT about what we need to do to make the system compliant and how to manage any under or over payments
- sought legal and subject matter advice internally and externally
- engaged with other public sector departments with similar issues.
How long will this project take?
The project has now made payments to affected current staff up to June 2019 and is transitioning this work over to BAU. Any remediation payments owed to former staff are expected to be finalised by the end of September 2019. Once this is signed of, relevant documentation is verified for individuals and updated in the system, payments can commence. Payments to former staff will be phased as we receive and verify information from former staff from October 2019 onwards.
What do I need to do to receive remediation payments I’m owed?
Please fill in the former staff form above and we will let you know if you are affected or not. If you are, further documentation will be required including an IR330 and KS2 form based on your current situation. If you have changed your bank account number or name we will need formal verification of these changes. Once this information has been collected, updated and verified in our system and payment amounts finalised at the end of September2019 we will notify you of the amount due and when payment will be made.
What is the Ministry doing to make sure the issues are addressed and aren’t repeated in the future?
The project team is working to make recommendations about what is needed to fix compliance issues with the payroll system.
Does this take into account my previous employment in other Agencies?
Our remediation payments are for the time you worked at MFAT since July 2010 and were paid through our Wellington payroll system. You should contact any other agencies you worked for during this time to find out if they also had issues with Holiday Act compliance.
If Kiwisaver contributions and deductions are paid on the Holidays Act remediation payment, why are other super schemes not included?
Kiwisaver is payable on most taxable income whereas other pension schemes are calculated on base salary.
How was my remediation payment calculated?
Since 2017 a process began to agree how we should compensate staff for any short payments under the Holidays Act. During this process we considered legal advice, the approach taken by other agencies and employers and we produced a set of detailed assumptions about how we would calculate the amount anyone may be owed. Once this was complete, we consulted with staff and Unions on the assumption document, had it externally reviewed and then agreed by the Senior Leadership Team.
A Calculation Model was created to calculate the amount payable for each individual based on the assumptions and historical payroll data. The Calculation Model has been formally tested to ensure it calculates in accordance with the assumptions and it was subjected to an independent review from an external expert in the field.
As a result of this work we have been able to determine the amounts individuals are owed for Holidays Act remediation payments.
In addition to this work, and prior to payment, we are manually checking the calculation of the amount owed for staff that may be owed large amounts or where other factors indicate that a final check is sensible.
Why is my remediation payment different to others?
Individual circumstances can result in different amounts owing for similar staff members because of differences in allowances, lump sum payments, reimbursements, grants, hours of work, when and how much leave has been taken, final pays, and the value of any Holidays Act adjustment payments already made.