A couple of years ago, we began the project to proactively review our payroll system (chris21) to make sure that we calculate holiday and leave payments in compliance with the NZ Holidays Act 2003.

We recently completed this detailed review and have identified some inaccuracies in our leave calculation methodology that have resulted in leave and holiday pay underpayments or overpayments to our employees.

We have now commenced the process of confirming any underpayments to former employees and making payments of wage arrears where they are due.

The issues relate to entitlements under the Holidays Act 2003 for the calculation of annual leave, bereavement leave, alternative holiday, public holiday and sick leave payments. The Holidays Act 2003 legislation is complex and across New Zealand businesses, the interpretation of the rules and calculations have varied extensively.

For salaried employees, the issues mostly relate to the averaging of annual leave payments. As we pay monthly, the daily rate alters each month depending on the number of worked days.

For waged employees, the issues mostly relate to which allowances should and shouldn’t be included towards the averaging for leave payments.

We will be writing to former employees who are owed a payment. Affected former employees will be sent a letter or email from F&P with information about their payment and how to claim it. F&P will use the last contact details we had on record for these people when they left F&P.

All employees who started with us prior to 31 August 2018 may be impacted. Not all employees who worked during this period are affected, as their holiday pay and other leave may have been calculated at the correct, or a higher, rate.

There are two reasons why this may have happened:

1. You may be one of the people who are not affected by these issues. If you would like to check, email holidaysact@fphcare.co.nz
2. The address or email address we have for you may not be your current address. We encourage former employees to email holidaysact@fphcare.co.nz. We can then check if you are owed a payment. 

There is a six-year limitation period that applies to holiday pay remediation claims. F&P has taken a more generous approach by remediating over a longer period than that required by law: 1 April 2010 – 31 August 2018 (eight years).

The union representatives have been kept up to date and briefed on remediation payments.

If you have been underpaid, you will receive a letter or email explaining the details of your remediation calculation and the amount due to you. This amount will then be paid into your nominated bank account after you have provided the required documentation.

Everyone’s pay and leave history are unique and as such, individual calculations for each employee (employed prior to 31 August 2018) have been completed. 

If you’re due an underpayment, we will pay the amount into your nominated bank account after you have provided the required documentation. This will be paid to you as soon as possible however depending on claim volumes this may take several weeks to process your claim.

Remediation payments will include a compensatory payment of 7% to recognise any inconvenience caused due to the shortfall. We are confident that we have correctly identified any wage or salary arrears owing. However, if we were to become aware of any further underpayments in relation to this reconciliation period at any stage, we would offset such underpayments against the compensatory payment that was paid. 

You will receive a summary of the underpayment by leave type (annual leave, bereavement leave, alternative holiday, public holiday and sick leave). Due to the large amount of data required to calculate the payments, you will not receive a detailed breakdown with your letter or email.  

Income tax (PAYE) will be deducted from remediation payments (including the compensatory payment) in accordance with the tax code you provide to us as declared in your signed Tax Code Declaration Form (IR330).

For some employees, the remediation payment will result in a tax refund being due from Inland Revenue. Employees should review their tax positions to determine whether they are due a refund. Refer to this Inland Revenue link: https://www.ird.govt.nz/income-tax-individual/end-year

Holidays Act 2003 remediation payments will be subject to normal KiwiSaver and other applicable deductions that are in place at the time of payment such as student loan repayments.

Should no Kiwisaver form be provided, no contributions will be made and the payment made to you will not have Kiwisaver contributions deducted.

We encourage you to make contact with relevant organisations such as Inland Revenue to discuss any impact this remediation payment might have on child support, working for family tax credits or other such matters.

An electronic payslip with the details of your payment can be requested once you have received the payment from our Holidays Act team. You can request this by emailing HolidaysAct@fphcare.co.nz.

We appreciate that it has taken time to determine and process the remediation payments. Our focus has been on investigating the issue thoroughly and ensuring the remediation payment calculations over an eight year period are accurate for each impacted employee. We have engaged several third parties to verify our calculations and the process that has been undertaken.

We will need you to provide documentation to verify your identity and to confirm that you are authorised to act on behalf of the estate. If you are the authorised person for someone who has died and who left F&P during the relevant time period, please contact us at HolidaysAct@fphcare.co.nz and we can work through this with you.

Former employees who are eligible for a remediation payment, will need to submit a claim form which then needs to be submitted online. The following documentation is required to be uploaded to complete your claim:

• Proof of identity: copy of birth certificate, passport, certificate of citizenship, immigration NZ visa, drivers license or Kiwi Access (formerly HANZ 18+) card, please note if your identity document has two sides both sides must be provided;
• Tax code and IRD number: a signed Tax Code Declaration Form (IR330); and
• If contributing to KiwiSaver a signed IRD KiwiSaver Deduction Form (KS2)

The claim form and submitting the supporting documents can be completed online. Otherwise a claim can be lodged by email by downloading the PDF form, printing it, completing it and scanning or photographing the completed form along with the above supporting documents.

No postal or hardcopy applications will be accepted.

A major focus of the project has been ensuring that our payroll system is now compliant with the Holidays Act 2003.

We have put in place several corrections to our payroll system. The final fixes were put in place effective 31 August 2018, and we have run checks since then with third party providers to ensure that the payroll system is now calculating leave payments as per the requirements of the Holidays Act 2003.

Former employees can email HolidaysAct@fphcare.co.nz for more information.