Holidays Act 2003, s 16

You’re entitled to a minimum of four weeks of paid annual holidays (“annual leave”) at every 12-month anniversary of when you started your job. Everyone is entitled to annual leave, whether you’re working in a permanent role or a casual role. If you’re on a casual or fixed term employment agreement, you might get your annual leave “paid out” in the form of an extra 8% each time you’re paid (see: “Why do some jobs pay an extra 8% instead of annual leave?” below).

You have to be working continuously at a job for 12 months for your annual leave entitlement to kick in. Your employment agreement can override this if it improves the terms – for example, if it allows you to access your annual leave after six months instead of 12.

If your employer agrees, you can take your annual holiday before you are technically entitled to it. This is called “taking leave in advance”. If you take leave in advance and then resign with a negative leave balance, you will have to pay your employer the difference.

If your job ends before you have continuously worked for 12 months, your employer must pay you annual holiday pay at 8% of your gross earnings, less any holiday pay paid in advance or paid on a pay-as-you-go basis.

Holidays Act 2003, ss 18–19, 29–35

Your employer must allow you to take your four weeks’ annual leave within 12 months after you become entitled to it. If you want, you’re also allowed to take at least two weeks of your annual leave in one continuous period.

If you’ve asked to take annual leave at a particular time, your employer can’t unreasonably refuse this request.

Your employer can require you to take your annual leave at a particular time if:

• you’re unable to reach agreement on the timing of annual leave, or
• your workplace has an annual closedown period.

A closedown period is when an employer usually closes the workplace and requires employees to take all or some of their annual leave (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 leave at a particular time.

Holidays Act 2003, ss 21–28

When you take annual leave, your pay should be the higher of the following two amounts:

• your ordinary weekly pay at the time you take your annual leave, or
• your average weekly earnings over the 12 months before you take your annual leave (this formula is used when your hours have changed during the year).

Holidays Act 2003, s 27

Your employer must pay you for your annual leave period before you go on leave, unless you’ve agreed it will be paid in the usual pay period.

If your employment has come to an end, any annual leave pay owing must be paid in your final pay.

Holidays Act 2003, s 28

There are two situations where you can be paid on an as-you-go basis, instead of taking annual leave. These are if:

• you’re employed on a fixed-term employment agreement of less than 12 months, or
• you work for the employer on a casual basis that’s so intermittent or irregular that it’s impractical for your employer to provide you with four weeks’ annual leave.

A pay-as-you go arrangement is designed for employees who would otherwise not really benefit from annual leave. This can only be used if you’ve agreed to it in your employment agreement. If this is the case, you’ll usually receive an additional 8% of your wages in each pay period. The extra 8% should be identifiable in your payslip.

Holidays Act 2003, s 16

You and your employer can agree that you’ll be paid out up to one week of your minimum annual leave entitlement each year.

You can carry over annual leave from year to year. If you don’t use all your annual leave entitlement in a 12-month period, those days will automatically carry over and be added to your leave entitlement for the next year.

Your employer should 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 you take regular breaks from work.