On this page
How it affects you
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.
What you can do
Please contact us by email at HolidaysAct@mfat.govt.nz. We will let you know if you were impacted and what other information is required before we can make payment.
Checking for a deceased person or someone you act for
To check if a deceased person’s estate or someone you act for is due a remediation payment, Please email us at HolidaysAct@mfat.govt.nz with your details and those of the person you are acting for. We will need a copy of your authority to act before we provide information about any payment that may be due.
Timing of remediation payments
Before we make payment, we first need to verify your information and collect new IR330(external link) and KS2(external link) forms so we know the correct tax and Kiwisaver deduction rates to apply. These forms are available from IRD. The Kiwisaver form is only required for current members of Kiwisaver. Payment will normally be made to the bank account we hold on file for you. If these details have changed we will also need to collect evidence that the new account is in your name.
Once we have collected the information we need, we will confirm the amount you are owed and let you know when payment can be expected. We will contact you again when payment is made and provide you with a payslip for the remediation payment.
Consequences for tax or benefits
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(external link) such as an arrears payment.
You can also contact the IRD directly on 0800 227 774.
Our work to comply
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.
Email us if you have any questions at HolidaysAct@mfat.govt.nz.
We update our FAQs as required. 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 are not aligned with the Act. Like many other organisations, the Ministry’s payroll system does not always calculate a person’s holiday pay correctly. That means that some people’s holiday pay payments have been calculated incorrectly. We are fixing 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 can make payments to former staff members as soon as we have collected the required information from them. The required information typically consists of an IR330 form and a KS2 form. If you email us at HolidaysAct@mfat.govt.nz we will let you know if you have been impacted and we will send you links to the forms we need. Once the information has been collected we will notify you of the amount due and when payment will be made.
Are staff 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.
Has the Ministry engaged with Unions?
Yes, the Ministry has engaged 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 the Public Service 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 Public Service 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.
- Made remediation payments to all impacted current and many former staff members.
How long will this project take?
The project made payments to affected current staff up to June 2019 and transitioned this work over to the Payroll team who will make ongoing payments until system compliance is achieved. Remediation payments for former staff are now being paid as we make contact with impacted people.
What do I need to do to receive remediation payments I’m owed?
Please email us at HolidaysAct@mfat.govt.nz so we can let you know if you have been impacted and send you links to the forms we need. Once the information has been collected we will tell you how much you are owed and when payment can be expected.
What is the Ministry doing to make sure the issues are addressed and aren’t repeated in the future?
The People Division is working on resolving 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?
In 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 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.