Managing Leave Liability

Keeping an eye on leave liability makes sense. People need leave to recharge and refresh, it needs to work for you operationally, and it is critical that the value of leave liability does not create financial strain in the case of a resignation or a restructure.

To manage that liability there a few points worth considering:

• Review leave balances and if any are substantial (greater than 15 - 20 days) ask the employee to set out a plan to take a specified amount of leave over the next 3 - 6 months

• If agreement cannot be reached the employer can require the employee to take leave on 14 days written notice

• Be aware of leave balances for people working remotely. We are seeing increasing annual leave balances with employees able to attend appointments, manage family commitments, or deal with personal matters while working remotely, without needing to take annual leave

• Be mindful of statutory holidays and the use of annual leave (I had an employee who planned her leave around every statutory holiday - top marks for utilisation but not fair on the rest of the team)

• If you operate in professional services and bill by the hour, be mindful of the impact on revenue of leave built around statutory holidays

• Ensure your leave policy specifies that travel arrangements made prior to approval of leave will not guarantee a subsequent leave application is approved

• Manage leave over the closedown period at Christmas and New year - organisations are permitted one closedown per year

If you would like further guidance on managing leave liability, please call us on 09 377 9891 or email us at knowhow@knowhow.co.nz

Sylvia Wood

Director