No, it’s not a joke, just really bad management by the present government and MBIE (YET AGAIN), adding further to the issues with the Holidays Act.

You may have seen the following notification:

‘From 1 October 2023, the minimum pay for Recognised Seasonal Employer (RSE) workers is increasing.  They will also have sick leave entitlements from their first day of employment.’

To see the full article, click here.

A couple of months ago, I was contacted by a senior policy advisor from MBIE to help in answering questions concerning payroll from the Recognised Seasonal Employer Scheme Review.

They wanted to know how easy it would be for payroll to provide sick leave entitlement to an RSE worker from day one.  I said this is quite different from what we have now and would need to see the bill on how they planned to do it, as it would be sick leave entitlement provided on day one, not at the 6-month mark (meeting the criteria under Section 63 of the Act).  The response I got was that they wanted to avoid creating a bill and going through changing the Holidays Act as the employers signed up to the RSE scheme had agreed to do this, and the Minister wanted it done.

I believe there is something like 200 employers involved in the RSE scheme, so it’s not going to impact all employers.  However, in payroll terms, those 200 employers don’t all use the same payroll system, so trying to implement this agreed new policy change (not mandated by law) will create a nightmare for payroll providers and payroll practitioners.  I would not be changing software on a policy revision without legislative backing.  There is the cost involved in changing software, an election looming and the mess of the Holidays Act that we are still waiting to have resolved.

The government and MBIE have been honestly mucking around since 2018 on a new Holidays Act without getting payroll truly involved.  There is even part of that new act providing sick leave entitlement from day one, but it must be so bad they could not even draw on that to create a workable legislative option to do this for RSE workers that employers and payroll could have had some degree of certainty on.

I have already received questions from payroll providers on what they need to do to implement this change, as they think the Holidays Act has been changed (it has not).  My advice is that this should be seen as an agreed term.  And I would be pushing back on changing software for a select group of employees until it either becomes law or is not needed because we head in another direction from the results of the upcoming election.

Of course, a payroll provider could see this just as a customisation and charge for it (have fun getting it in for the 1 October)!