Frequently asked questions – holidays act remediation for former ERO employees
If you have received notification that you are entitled to a payment, please read the following information regarding the process.
Background
What is the Holidays Act 2003?
The Holidays Act is a fundamental piece of legislation which sets out leave entitlements for employees that employers are obliged to provide. Click here to view the Holidays Act on the legislation.govt.nz website.
Why the review?
The Holidays Act and how to interpret it, has been a highly publicised issue encountered by many organisations, including public service departments. ERO has been working with NLC Payroll, independent specialist consultants with experience in assessing payroll systems to determine any non-compliance with the act and correcting this, as well as facilitating the process to correct any resultant underpayment (remediation). NLC will be contacting previous employees on behalf of ERO, so the communications you will receive will be from them and the email that you will be directed to use will be EROHolidaysAct@nlcpayroll.com
What has caused this?
Compliance issues with the Holidays Act have been common in both the public and private sectors because many payroll systems are not aligned with the Act. Like many other organisations, ERO’s payroll system did not always calculate a person’s holiday pay correctly. That means some people’s historic holiday pay payments have been calculated incorrectly. We are correcting this by reviewing payments made, re-calculating and making remediation payments to anyone who has been incorrectly paid.
Who is in scope for remediation?
Together with NLC we have already identified and corrected the payroll system, so holiday pay is now calculated correctly, and have made any required remediation for ERO employees current at the time. The next step is to organise payment to any previously ceased employees who require a remediation payment to be made. This applies to employees ceased prior to the holiday pay remediation process being completed for current employees in April 2023.
| In scope | Out of scope | |
|---|---|---|
| People | Former employees who left ERO between 3 July 2014 and 30 March 2023. | Current and former contractors Current employees |
| Contract types | Permanent Fixed term Casual | Independent contractors Vendor contractors Agency contractors |
| Time period | All statutory leave transactions and entitlements after 3 July 2014 and before 23 November 2022. | All statutory leave transactions and entitlements prior to 3 July 2014. |
Calculation
Can I see the calculation you used to determine the amount I am owed?
The calculation of remediation payments is complex involving a large amount of data, and as such, detailed calculation break downs will not be provided. However, if you wish to obtain a summary of your calculation this can be arranged on request.
Payment
What do you need from me to make payment?
We need to verify your identity, including your bank account details to make payment. By logging onto the remediation portal you will be led through the process step by step.
You will need the following information before starting the process in the remediation portal:
- A Tax code declaration form - IR330 with correct IRD number.
- Your verified bank account details (you will need to provide a copy of a bank statement or other proof of account details. Also please specify if this is an overseas bank account)
- The reference number from the communication we sent you.
- A marriage, birth or dissolution of marriage certificate if your name has changed during the period stated.
- A current driver licence or passport (a passport is required for anyone currently residing overseas).
- A KiwiSaver deduction form - KS2 (if you are currently a contributing KiwiSaver member).
Logging in to the portal:
1. Click 'First time logging in/reset password'.
2. Enter your reference number then click 'Submit'
3. On the ‘New Password’ page, answer the two security questions then click ‘Submit’.
4. Your new password will be displayed on this page in bold. Copy your password then click ‘Login Page’ to take you back to the ‘Sign In’ page.
5. Enter your reference number, then paste in your password and click ‘Sign In’.
Next steps
The NLC Payroll team will verify your information and get in touch with you by email to confirm the next steps. They will let you know how much your remediation payment is and when the payment will be paid.
I’m a former employee but I’ve changed email/postal address and didn’t receive any correspondence from you. What do you need from me to ensure I’m included as part of the review process?
Please email us at EROHolidaysAct@nlcpayroll.com
What can I tell an ex-colleague who no longer works at ERO?
We want to ensure that anyone who has previously worked at ERO between 3 July 2014 and 30 March 2023 is reimbursed if there are any outstanding monies due. Please ask them to email EROHolidaysAct@nlcpayroll.com and we will work through the process with them.
Checking for a deceased person or someone you act for.
To check if a deceased person’s estate or someone you act for is due a remediation payment, Please email us at EROHolidaysAct@nlcpayroll.com with your details and those of the person you are acting for. We will need a copy of your authority to act before we provide information about any payment that may be due.
I now live overseas how are you handling international payments?
Please send your contact information to EROHolidaysAct@nlcpayroll.comand someone will contact you. ERO will pay into a foreign bank where you no longer have a valid New Zealand bank account. The payment will be made at the exchange rate set by ERO’s primary banker on the day of the payment. ERO will cover bank fees for you but please note that some banks can add excess fees on top of what is covered by ERO that is outside of our control. In addition to the information requested above to make sure you receive the money first time we also ask for confirmation of the currency of your account.
How does this payment impact my tax obligations?
The remediation payments will be rated as an ‘extra pay’ for tax purposes. We encourage you to contact the relevant organisations such as Inland Revenue for advice about whether your remediation payment affects any agreement you have with them about your current earnings, benefits, child support or any other matters. The Inland Revenue website has useful information on the tax treatment of lump sum payments such as an arrears payment.
Please see attached - Useful information on the tax treatment of lump sum payments.
When will I receive payment?
We will be processing any confirmed remediation payments within approximately one month of receiving your competed verification information. Payment runs are usually processed on a Thursday and payments should appear in your bank account by end of day Friday the week that your payment is processed. If you have not received payment within five weeks of submitting your verification information, then please contact us at EROHolidaysAct@nlcpayroll.com
Will you make KiwiSaver contributions as part of the payment?
If you are a contributing KiwiSaver member your remediation payment will be less your KiwiSaver/employee superannuation contribution. You will also receive the company contribution.
You need to provide your KiwiSaver information as part of completing your verification form.
Other superannuation scheme contributions are not applied/deducted due to the way these are set up/calculated.
Why are we paying such small amounts?
We have an obligation to endeavour to pay everyone correctly so will be making all payments even if very small amounts. However, if you feel the amount you are entitled to is too minor to warrant the process, you can advise us accordingly.
If I have been overpaid, will ERO be seeking repayment?
If people have been overpaid ERO will not be seeking repayment.
Going forward
Has the issue been resolved so it doesn’t happen again?
Following the Holidays Act review we have undertaken together with NLC Payroll Consultancy (who specialise in Holidays Act compliance and remediation), we are confident our systems are now compliant, and this issue will not reoccur.
Link to portal: NLCHolidaysActDemo (myobpayglobal.com)