FSSI periodically reviews its adherence to the Holidays Act 2003. Like many other New Zealand businesses, we have identified several issues relating to the calculation of leave payments. These have arisen due to the complexity in applying the Holidays Act. These issues have resulted in some staff receiving incorrect leave payments.
We have amended our payment rules based on external expert advice and have updated our payroll system.
We have also introduced best practice guidelines and training to ensure that management have the knowledge required to ensure their staff leave entitlements are treated correctly under the Holidays Act.
The issues affect some current staff and former staff employed by FSSI. Most of the staff affected are those who worked irregular hours or a lot of overtime.
FSSI periodically reviews its adherence to the Holidays Act 2003. However, recent changes in interpretation of the Act have caused us to review again. This most recent review revealed some areas of non-compliance.
Every staff member has a different leave pattern and earnings history, so each staff member has been assessed individually.
This investigation needed to be thorough to ensure that all staff who were underpaid were correctly identified. We have taken considerable care to ensure back-payments and/or adjustments are correct.
We also needed to update/upgrade our payroll systems and processes so that these errors do not reoccur in the future.
COVID-19 has also delayed our investigation and remediation work programme.
Current Employees: FSSI will write to all current employees who are owed a back-payment and/or annual leave and advise them of the amount and/or time they are owed.
If you believe you are eligible and have not been contacted by mid December 2020, please email holidaypay@fssi.co.nz.
Former Employees: Former staff will be written to at their last known address, inviting them to register their interest in assessing if they are eligible for backpay. This can be done from mid to late January 2021 via the Register Your Interest page.
Back-payments will vary depending on the individual’s work pattern, their holiday rates and leave history.
Current Employees: Eligible employees will receive a back-payment and/or an increase in their annual leave balance.
Former Employees: Eligible employees will receive payment covering any backpay and/or positive leave adjustment. The positive leave adjustment will be converted to a dollar amount and included as part of their back-payment.
All back-payments made will have PAYE (at current rates) and KiwiSaver deductions applied. If you have any other deductions (e.g. a student loan), this will also be paid out of your backpay. If you are a former employee then you will need to provide your PAYE tax code, KiwiSaver details and Student loan tax code (the latter two as applicable).
IMPORTANT
This payment may affect your obligation to pay or your entitlement to receive a benefit (such as ACC or child support). We encourage you to discuss in advance your back-payment with the benefit provider.
Current Employees: You should have received an email in early December 2020 advising that FSSI was undertaking a Holidays Act review. A letter confirming your entitlement (or otherwise) will be sent by mid December 2020. If you have not received a letter please email holidaypay@fssi.co.nz.
Former Employees: We are writing to the last known address of all former employees during January 2021 advising that FSSI is undertaking a Holidays Act review. Regardless of whether they have received a letter or not, former employees can register their interest in FSSI assessing their eligibility for back-pay. This can be done from mid to late January 2021 via the Register Your Interest page.
The back-pay covers the period dating back to the 18th of October 2013.
The review covers all employees that have been employed by FSSI since 18th of October 2013. Individual work situations have been taken into account within the analysis and calculations.
If you have left FSSI and returned, this has been taken into account and the recalculations have included your previous employment with FSSI.
Current Employees: If you are a current employee of FSSI we don’t require any documentation from you.
Former Employees: For former employees, we need proof of your identity to allow us to confirm your eligibility:
If you are entitled to a payment, then we will need the following documentation:
The recalculation files involve large quantities of data and are complex and detailed. Due to this the full breakdown will not be provided.
If you finish with FSSI and you have already received a letter outlining your back-payment, we will make this payment into the bank account your final pay went into, unless you advise us otherwise.
We are required to verify you are the executor of the deceased employee’s estate or that you hold a valid power of attorney as the case may be. If you believe a former employee is entitled to a back-payment under one of the above situations, please contact us to discuss this further. You can email us at holidaypay@fssi.co.nz.
The original remedial back payment was calculated over a 6-year period from 18th October 2013 to 5th February 2020. When remedial back payments were made to current employees in December 2020 the effective date in the payroll system was set to June 2020 (back dated). This leaves a period from 05 February 2020 to 30 June 2020 which has now been further assessed.
Annual leave is calculated on your gross earnings based on the prior 52 weeks. Therefore, if you took annual leave between 5 February 2020 and 30 June 2020 you may be due a wash up payment. This could not be calculated until the original remediation payment was completed.
Due to the compounding nature of holiday pay this final “wash up” payment is an expected and necessary step to complete the process and ensure that you have received your full holiday pay entitlements.
In order to calculate this “wash up” payment we have used an estimation approach as per MBIE guidance. The final “wash up” payment only applies to those employees who took leave in the period 05 February to 30 June 2020 and had a calculated underpayment in the prior 12 months from the end of the original remedial period (i.e., 05 February 2019 to 05 February 2020.)
The estimation is based on the multiplication of the percentage of underpayment in the 12 months prior to 05 February 2020 and the value of any leave that you took between 05 February 2020 to 30 June 2020.
Our Holiday Pay remediation approach means that we have not only met the requirements of the Holidays Act but have gone over and above in our obligations and responsibilities as an employer for this period under the Act. We have done this by back dating your original remedial payment to June 2020, and the fact this amount is included in your leave calculations for a further 12 months going forward.
If current employees wish to understand the estimation approach in more detail, they can contact us at holidaypay@fssi.co.nz.
If you have any further questions or concerns, please email us at holidaypay@fssi.co.nz.