As a follow-up to our blog published on December 9, 2025 (Legislative Update for PeopleSoft HCM Global Payroll New Zealand – Holidays Act Reform – the new “Employment Leave Act”: What’s Changing and What It Means for You?), we are providing an update on the latest developments.
The New Zealand Government has now enacted the Employment Leave Act, which received Royal Assent on August 6, 2026. The new legislation will replace the Holidays Act 2003 effective August 6, 2028, marking a significant change to New Zealand’s leave and holiday framework.
The Employment Leave Act is designed to simplify leave administration, provide greater consistency for employers and employees, and reduce payroll complexity. A key element of the reform is the introduction of a predominantly hours-based approach to leave, which will reshape how leave entitlements are calculated and administered.
Employment Leave Act 2026- What’s changing in 2028
| Topic | New Employment Leave Bill 2026 |
| How Annual Leave is Calculated | Leave is stored in hours, making it easier to calculate and use. |
| Using Annual Leave | Can be taken in hours, giving more flexibility. |
| Cashing Up Annual Leave | Can cash up to 25% of your annual leave balance each year. |
| Sick Leave | Start earning sick leave from day one, based on hours worked. |
| Bereavement Leave | Available from your first day of employment. |
| Family Violence Leave | Available from your first day of employment. |
| Taking Leave | Leave can be taken in hours or part-days (where applicable). |
| Public Holidays | Introduces a clearer OWD test, especially for workers with irregular schedules. |
| Leave While on Other Leave | Annual and sick leave continue to build up during most statutory leave (such as parental, jury, and volunteer leave). |
| Changing Work Hours | Leave already earned stays the same even if your standard hours change later |
What happens next?
MBIE (Ministry of Business, Innovation & Employment: Home) will provide comprehensive guidance to support employers, employees and payroll providers for the transition over to the new rules on its Employment New Zealand website.
For more details:
- Changes to leave coming in 2028 | Employment New Zealand
- Holidays Act reform: Employment Leave Act | Ministry of Business, Innovation & Employment
Initial guidance has been published along with a timeline when further guidance and resources will be available.
Note: PeopleSoft Global Payroll for New Zealand currently provides support for several leave provisions addressed by the Employment Leave Act 2026. The Act also includes additional leave types and requirements that are not currently supported within the product. The scope of the PeopleSoft solution is being evaluated as part of the detailed legislative and product impact analysis. Once this assessment is complete, the requirements to be included in the delivered solution will be finalized and communicated in a subsequent update to this Position Statement.
Our Position Statement for 2026 is updated with the announcement of the Holiday Pay Reform. We encourage our customers to review the latest statement to keep up to date. The updated Position Statement can be found on My Oracle Support, Doc ID KB209403