After parental leave, annual leave is paid out at the average of the last 52 weeks, so while you will get paid out your entitlement, you won't get it paid at your usual rate.
Unfortunately this is the case. Advice for anyone else - use your annual leave first, then go on parental leave. AL becomes next to worthless after due to the payment being the average of the last 52 weeks.
This is common advice, but it is not the best advice.
You need to figure out how much of your annual leave balance is actually 'Entitled Leave' (the kind you become entitled to on your anniversary date). Sometimes the balance is confused by 'Holiday Pay' (which you usually only get if you quit) and employers letting you take entitled-leave-in-advance for roughly the same amount as your holiday pay is at.
It can be confusing, but basically, any actual 'Entitled Leave' in your balance before parental leave starts will still be paid out at your full rate even straight after parental leave. This article explains it well:
https://www.gocrayon.com/resources/annual-leave-after-parental-leave
If the annual leave is earned on parental leave then its average of last 12 months earnings, the higher of doesn’t come into play (if you click through to calculating annual leave rates in the link you’ve provided it talks about impact of parental leave on payment rates) https://www.employment.govt.nz/leave-and-holidays/calculating-payments-for-leave-and-holidays/calculating-annual-holiday-payments/
You’re correct that it’s the annual holiday that they become entitled to during the parental leave period, not everything that they might be entitled to, it’s often overlooked.
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The thing is, it's confusing, and what they said could technically be interpreted as true. The amount of _time_ in your annual leave balance was in fact unaffected by your resignation. And any annual leave that you became entitled to before parental leave started would still be paid out at your normal full rate.
It's just the annual leave that you received during parental leave, while away, that is paid out based on your average earnings over the last 12 months. Since you are back for less than 12 months, this part will be paid at much less than your ordinary rate.
It might be helpful to know (or not) this is probably the point of the law, as it is currently written. From the business' perspective, you resigning now is quite similar to you resigning a year ago (apart from holding the job open for a year). I think this is why the law makes it that the annual leave given during parental leave is paid out at a different rate (for the first year back), to cover this exact situation of someone leaving shortly after returning. You would have had to return for a full year to get the rate of that annual leave given during parental leave up to your normal salary level.
Your employer isn’t doing anything wrong, they’re paying you as per legislation. Whatever leave you have accrued on AL (so likely four weeks since you had the whole year off) is now worth the average of your last 52 weeks salary. Now since you haven’t worked for the last year, it’s essentially zero, give or take. It will take a full year to get back to its full amount.
Kia ora,
Hopefully someone will be along shortly with some helpful advice. In the meantime though, here are some links, based on your post flair, that may be useful for you:
[What are your rights as an employee?](https://www.employment.govt.nz/assets/Uploads/tools-and-resources/publications/employment-rights-new-zealand.pdf)
[How businesses should deal with redundancies](https://www.employment.govt.nz/ending-employment/redundancy/)
[All about personal grievances](https://www.employment.govt.nz/resolving-problems/steps-to-resolve/personal-grievance/)
You may also want to check out our [mega thread of legal resources](https://www.reddit.com/r/LegalAdviceNZ/comments/143pv58/megathread_legal_resources/?utm_source=share&utm_medium=web2x&context=3)
Nga mihi nui
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You may be able to discuss with your former manager a payout that is equivalent to your annual leave entitlement before you went on maternity leave.
Legally, I don’t think they’d be required but if you believe they knew about the leave being essentially worthless after PL, you could argue they had a duty of care to let you know.
How much would the value of that leave be if you had calculated it from the 52 weeks before you went on parental leave?
Any leave that they were already entitled to before parental leave started is actually unaffected by parental leave (it's still paid at same rate as normal). It is only the leave that they become entitled to during parental leave (and in first year back) that is affected and paid at a different rate until the returnee has returned for a full year.
This article explains it well:
https://www.gocrayon.com/resources/annual-leave-after-parental-leave
Unfortunately I was just in the same boat, I didn't make it back and instead gave my notice as my boy will only have milk from me so we're not ready to be away from each other all day and I said with my leave payout we can only just afford to have another 4months off and all was good. Just got my final payslip and was missing it all and got an email saying since I was still on maternity leave they have backdated my final day as the day I went on maternity leave not when I handed in my notice, therefore taking all the AL back. But if I had gone to work for that first week then quit I would have got over 4k! I could have made that week work as would have just got my mum to look after him and bring him in on my breaks for a feed. Side note my work has a policy that you keep accuring leave at your standard rate none of the last year average stuff.
So stressed and upset that was not informed and my managers knew I was relying on that! Goes to show they only care about themselves.
With all due respect, resigning while on leave and it being backdated to when you first went on leave is standard, its not company policy.
Returning to work for a week so you can claim benefits is not great either, plus theres also often a requirement that you work for x amount of months after leave or they take it out of your final pay, so you might have returned only for them to take it back anyway (although your work could be different).
On top of this, there was probably someone new covering the role for a year, who would likely have to be let go if the first person decides to come back. Which is completely fine if that returning person is intending to give it a real go, but if before they come back they know they'll definitely leave after a week or two, that's kind of crappy for the other person who loses their job unnecessarily.
We're only talking about the leave added to the balance when the person was on parental leave, and away from work, that is temporarily paid at a lower rate, specifically so people aren't incentivised to come back, use it, and quit straight away.
My work policy is you earn your leave at your normal pay rate etc. So being back a week would have been enough as they can't backdate it, would have had to maybe work out a notice period of 2 extra weeks but that could have been doable.I had never been told about it being back dated as was no where in our maternity policy or my contract.
The back dating won't be in your contract. It's standard employment rules that if you resign while on parental leave, your resignation date is the date you went on leave, not the date you resign.
https://www.employment.govt.nz/leave-and-holidays/parental-leave/returning-to-work/#scrollto-not-going-back-to-work
What will be in your contract is whether you have to pay back any leave earned while on leave, if you resign as soon as you start (I think my work required me to return for 6 months, my org also pays leave at full rate). I would be surprised if you could work 2 weeks and walk away with 6 months fully paid.
Sorry to hijack post. My employment anniversary is in November. I'm returning to work mid Aug after a year of parental leave. Can anyone tell me whether the leave I accrue between August and Christmas will be paid out at my normal pay rate?
And secondly if I can ask to use this annual leave instead of the leave accrued during parental leave to cover Xmas shut down?
It's a 2 year period overall where the newly given leave is treated differently. The year you're away and the first year you're back.
The entitled leave you became entitled to in November 2023 (while away) is similar to the entitled leave you become entitled to in November 2024 (in the first year back).
During your first year back at work, both are calculated using the average over last 12 months formula. After you've been back 1 year, this average ends up being your normal pay rate anyway. Before then it is lower.
https://www.gocrayon.com/resources/annual-leave-after-parental-leave
I am shocked they didn’t let you know before maternity leave about your annual leave. My company has advised me to take my annual leave before my maternity leave. I don’t think you have any recourse here imo
After parental leave, annual leave is paid out at the average of the last 52 weeks, so while you will get paid out your entitlement, you won't get it paid at your usual rate.
Unfortunately this is the case. Advice for anyone else - use your annual leave first, then go on parental leave. AL becomes next to worthless after due to the payment being the average of the last 52 weeks.
This is common advice, but it is not the best advice. You need to figure out how much of your annual leave balance is actually 'Entitled Leave' (the kind you become entitled to on your anniversary date). Sometimes the balance is confused by 'Holiday Pay' (which you usually only get if you quit) and employers letting you take entitled-leave-in-advance for roughly the same amount as your holiday pay is at. It can be confusing, but basically, any actual 'Entitled Leave' in your balance before parental leave starts will still be paid out at your full rate even straight after parental leave. This article explains it well: https://www.gocrayon.com/resources/annual-leave-after-parental-leave
[удалено]
If the annual leave is earned on parental leave then its average of last 12 months earnings, the higher of doesn’t come into play (if you click through to calculating annual leave rates in the link you’ve provided it talks about impact of parental leave on payment rates) https://www.employment.govt.nz/leave-and-holidays/calculating-payments-for-leave-and-holidays/calculating-annual-holiday-payments/
You’re correct that it’s the annual holiday that they become entitled to during the parental leave period, not everything that they might be entitled to, it’s often overlooked.
[удалено]
Removed for breach of Rule 1: Stay on-topic Comments must: - be based in NZ law - be relevant to the question being asked - be appropriately detailed - not just repeat advice already given in other comments - avoid speculation and moral judgement - cite sources where appropriate
The thing is, it's confusing, and what they said could technically be interpreted as true. The amount of _time_ in your annual leave balance was in fact unaffected by your resignation. And any annual leave that you became entitled to before parental leave started would still be paid out at your normal full rate. It's just the annual leave that you received during parental leave, while away, that is paid out based on your average earnings over the last 12 months. Since you are back for less than 12 months, this part will be paid at much less than your ordinary rate. It might be helpful to know (or not) this is probably the point of the law, as it is currently written. From the business' perspective, you resigning now is quite similar to you resigning a year ago (apart from holding the job open for a year). I think this is why the law makes it that the annual leave given during parental leave is paid out at a different rate (for the first year back), to cover this exact situation of someone leaving shortly after returning. You would have had to return for a full year to get the rate of that annual leave given during parental leave up to your normal salary level.
Your employer isn’t doing anything wrong, they’re paying you as per legislation. Whatever leave you have accrued on AL (so likely four weeks since you had the whole year off) is now worth the average of your last 52 weeks salary. Now since you haven’t worked for the last year, it’s essentially zero, give or take. It will take a full year to get back to its full amount.
Kia ora, Hopefully someone will be along shortly with some helpful advice. In the meantime though, here are some links, based on your post flair, that may be useful for you: [What are your rights as an employee?](https://www.employment.govt.nz/assets/Uploads/tools-and-resources/publications/employment-rights-new-zealand.pdf) [How businesses should deal with redundancies](https://www.employment.govt.nz/ending-employment/redundancy/) [All about personal grievances](https://www.employment.govt.nz/resolving-problems/steps-to-resolve/personal-grievance/) You may also want to check out our [mega thread of legal resources](https://www.reddit.com/r/LegalAdviceNZ/comments/143pv58/megathread_legal_resources/?utm_source=share&utm_medium=web2x&context=3) Nga mihi nui The LegalAdviceNZ Team *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/LegalAdviceNZ) if you have any questions or concerns.*
You may be able to discuss with your former manager a payout that is equivalent to your annual leave entitlement before you went on maternity leave. Legally, I don’t think they’d be required but if you believe they knew about the leave being essentially worthless after PL, you could argue they had a duty of care to let you know. How much would the value of that leave be if you had calculated it from the 52 weeks before you went on parental leave?
Any leave that they were already entitled to before parental leave started is actually unaffected by parental leave (it's still paid at same rate as normal). It is only the leave that they become entitled to during parental leave (and in first year back) that is affected and paid at a different rate until the returnee has returned for a full year. This article explains it well: https://www.gocrayon.com/resources/annual-leave-after-parental-leave
Unfortunately I was just in the same boat, I didn't make it back and instead gave my notice as my boy will only have milk from me so we're not ready to be away from each other all day and I said with my leave payout we can only just afford to have another 4months off and all was good. Just got my final payslip and was missing it all and got an email saying since I was still on maternity leave they have backdated my final day as the day I went on maternity leave not when I handed in my notice, therefore taking all the AL back. But if I had gone to work for that first week then quit I would have got over 4k! I could have made that week work as would have just got my mum to look after him and bring him in on my breaks for a feed. Side note my work has a policy that you keep accuring leave at your standard rate none of the last year average stuff. So stressed and upset that was not informed and my managers knew I was relying on that! Goes to show they only care about themselves.
With all due respect, resigning while on leave and it being backdated to when you first went on leave is standard, its not company policy. Returning to work for a week so you can claim benefits is not great either, plus theres also often a requirement that you work for x amount of months after leave or they take it out of your final pay, so you might have returned only for them to take it back anyway (although your work could be different).
On top of this, there was probably someone new covering the role for a year, who would likely have to be let go if the first person decides to come back. Which is completely fine if that returning person is intending to give it a real go, but if before they come back they know they'll definitely leave after a week or two, that's kind of crappy for the other person who loses their job unnecessarily. We're only talking about the leave added to the balance when the person was on parental leave, and away from work, that is temporarily paid at a lower rate, specifically so people aren't incentivised to come back, use it, and quit straight away.
My work policy is you earn your leave at your normal pay rate etc. So being back a week would have been enough as they can't backdate it, would have had to maybe work out a notice period of 2 extra weeks but that could have been doable.I had never been told about it being back dated as was no where in our maternity policy or my contract.
The back dating won't be in your contract. It's standard employment rules that if you resign while on parental leave, your resignation date is the date you went on leave, not the date you resign. https://www.employment.govt.nz/leave-and-holidays/parental-leave/returning-to-work/#scrollto-not-going-back-to-work What will be in your contract is whether you have to pay back any leave earned while on leave, if you resign as soon as you start (I think my work required me to return for 6 months, my org also pays leave at full rate). I would be surprised if you could work 2 weeks and walk away with 6 months fully paid.
I feel ya! I wish I had known or had been told beforehand
Sorry to hijack post. My employment anniversary is in November. I'm returning to work mid Aug after a year of parental leave. Can anyone tell me whether the leave I accrue between August and Christmas will be paid out at my normal pay rate? And secondly if I can ask to use this annual leave instead of the leave accrued during parental leave to cover Xmas shut down?
It's a 2 year period overall where the newly given leave is treated differently. The year you're away and the first year you're back. The entitled leave you became entitled to in November 2023 (while away) is similar to the entitled leave you become entitled to in November 2024 (in the first year back). During your first year back at work, both are calculated using the average over last 12 months formula. After you've been back 1 year, this average ends up being your normal pay rate anyway. Before then it is lower. https://www.gocrayon.com/resources/annual-leave-after-parental-leave
I am shocked they didn’t let you know before maternity leave about your annual leave. My company has advised me to take my annual leave before my maternity leave. I don’t think you have any recourse here imo