Refresher: Your Christmas leave questions answered

The Ministry of Business, Innovation and Employment confirms employees' options around annual leave, including cashing leave in and taking leave without pay.
The Ministry of Business, Innovation and Employment confirms employees' options around annual leave, including cashing leave in and taking leave without pay. Photo credit: Getty.

With just a few weeks left to Christmas, one of the things to tick off is getting annual leave approved and booked in.

Employees are entitled to at least four weeks’ paid leave each year. But as people have different needs, the rules can be difficult to navigate.

Can annual leave be cashed out, does it have to be taken during an employer’s closedown period and what are the options for people needing more time off?

Newshub spoke to the Ministry of Business, Innovation and Employment (MBIE) to get a refresher.   

1. Can I 'buy' my annual leave instead of taking it?

It’s important to have time off from work to recharge. But some employees may prefer to take part of their paid holidays as cash instead.

Employees are entitled to four weeks' paid holidays after each year of continuous employment.

MBIE national manager labour inspectorate Stu Lumsden said employees can buy up to a week's annual leave. Providing they’ve completed a year’s employment, they can ask their employer in writing (e.g. by email), to pay it out. 

“Employees can ask their employer to pay up to one week of their four weeks’ minimum entitlement to annual holidays per year,” Lumsden said.

Employees can cash in their one week’s leave all at once, or make multiple requests until the full week is paid out.

MBIE said employers should consider the request within a reasonable time and reply in writing. They have the right to say ‘no’ and don’t have to give a reason.

Some workplace policies say they don’t have to consider requests for annual holidays to be cashed up.  Employees can check their workplace policy and employment agreement before making a request.

People who work irregularly or are on fixed term contracts less than 12 months may have agreed to be paid holiday pay as part of their regular pay. If this is the case, there’s no paid leave to be cashed out. 

More information can be found here.

2. My employer is closing down over Christmas - do I have to use my leave during this time?

Your employer may have an annual closedown period and ask for leave to be taken during this time.  

MBIE confirmed if this is the case, employees should receive 14 days’ notice. They would then be required to take their annual holidays over the closedown period. 

More information can be found here.

3. I need more than four weeks’ annual leave to look after children (or other dependents).  What are my options?

With schools off from December through to early February, for some parents and caregivers, four weeks’ annual leave may not be enough.

If their employer agrees, employees can take leave without pay or take annual leave in advance.

Taking leave without pay means extra leave is taken, but it isn't paid. 

“Employees aren’t entitled to take leave without pay; they can only take it if their employer agrees,” Lumsden said. 

Some employees might agree this with their employer upfront, and have it specified in their employment agreement. 

Otherwise, they can talk to their employer before taking the leave.

“This agreement could be contained in their employment agreement, or could be negotiated by the employee and employer at the time leave is taken,” Lumsden added. 

More information can be found here.

Taking leave in advance means employees have less annual holidays available the following year. As with leave without pay, this is only an option if an employer agrees.

More information can be found here.

4. I’ve been asked to work on a stat day - am I entitled to any compensation?

Some employers may ask employees to work on a statutory holiday, such as Christmas Day, Boxing Day or New Year’s Day.

MBIE confirmed that if a public holiday falls on a day that’s otherwise a work day (for example, in 2020, Christmas Day falls on a Friday), an employee should be given a paid holiday on an alternative day.

“If an employee works on a public holiday that would not otherwise be a working day for them, they aren’t entitled to an alternative holiday, but they’re still entitled to be paid at the rate of at least time and a half for the hours they work,” Lumsden added.

More information can be found here.

To avoid doubt, employees are urged to check if their employer has an annual closedown period. They can also check their employment agreement and workplace policies on whether they’re required to work on statutory holidays and on cashing in leave or taking unpaid leave.