Holidays and annual leave
Annual holidays (Annual leave)
What annual holidays am I entitled to?
You’re entitled to four weeks of paid annual holidays (often called “annual leave”) at every 12-month anniversary of when you started your job. This right applies whether you’re full-time or part-time, and whether you’re a permanent employee or casual or fixed-term employee.
You and your employer can agree that you’ll be paid out up to one week of your minimum annual holiday entitlement each year.
When can I take my annual holidays?
Your employer must allow you to take your four weeks’ holiday within 12 months after you become entitled to it. You’re also allowed to take at least two weeks of these holidays in one continuous period, if you ask to do this.
Note: If you don’t work a standard working week, you and your employer can come to an agreement about how your entitlement to four weeks’ annual holiday will be met. If you can’t agree, either side can ask a labour inspector to decide this issue (see the chapter “Resolving employment problems”).
Holidays Act 2003, ss 18, 19, 32
The issue of exactly when you’ll take your annual holidays is to be agreed between you and your employer, but if you’ve asked to take holidays at a particular time your employer can’t unreasonably refuse. If you can’t agree on the timing, or if your workplace has an annual closedown period, your employer can require you to take your holidays at a particular time (see below, “Can my employer make me take my holidays at a particular time?”).
If your employer agrees, you can take your annual holidays in advance of when you become entitled to them. This is called “anticipating” annual leave.
Can my employer make me take my holidays at a particular time?
Holidays Act 2003, ss 19, 29–35
Your employer can require you to take your annual holidays at a particular time, if:
- you’re unable to reach agreement on the timing of annual holidays, or
- your workplace has an annual closedown period.
A closedown period is a period when an employer usually closes the workplace and requires employees to take all or some of their annual holidays (for example, when a business closes over the Christmas/New Year period).
Your employer must give you at least 14 days’ notice if you’ll be required to take annual holidays at a particular time.
How is my annual holiday pay calculated?
When you take annual holidays your holiday pay is the higher of the following two amounts:
- your ordinary weekly pay at the time you take your holiday, or
- your average weekly earnings over the 12 months before you take your holiday (this formula is used when your hours have changed during the year).
If your job ends before you have worked for 12 months, your employer must pay you annual holiday pay at 8.0 percent of your gross earnings, less any holiday pay paid in advance or paid on a pay-as-you-go basis.
When will I be paid my annual holiday pay?
Your employer must pay you your holiday pay before you take the holiday, unless you’ve agreed it will be paid in the usual pay period.
If your employment has come to an end, any holiday pay owing must be paid in your final pay.
You can be paid your holiday pay on a pay-as-you-go basis in some cases when it’s recognised that you won’t get the benefit of taking time off for annual holidays. The two situations where this is permitted are when:
- you’re employed on a genuine fixed-term agreement of less than 12 months
- you work for the employer on a basis that’s so intermittent or irregular (that is, genuine casual work) that it’s impracticable for your employer to provide you with four weeks’ annual holidays.
A pay-as-you go arrangement can only be used if you’ve agreed to this in your employment agreement. The annual holiday pay must be paid as an identifiable component of your employee’s pay and at a rate that’s at least 8.0 percent of your gross earnings.
Can I accumulate my annual holidays from year to year?
Yes, any annual holidays that you don’t use in a given 12-month period will automatically carry over to the next year and will accumulate.
However, in some situations your employer can require you to take annual holidays at a particular time, in which case you won’t be able to save and accumulate them, for example an annual closedown of the business. Many employers will try to manage your annual leave so you don’t accumulate too much from year to year. As part of their health and safety duties to manage stress in the workplace, they should ensure that workers take regular holidays. (See above, “Can my employer make me take my holidays at a particular time?”.)
