The Employment Leave Bill is making its way through Parliament and while it’s not yet passed into law by receiving Royal Assent, there are some actions you can take now to ensure that you have some basics in place for when (if) it does become law.
Identify Standard Working Hours for Your Employees
The basis of the Employment Leave Bill is that leave is accrued based on standard working hours.
These are defined as the hours an employee is required to work under their employment agreement and for which the employer must pay them. Leave accrual continues during periods of paid leave, parental leave, volunteer leave, and jury leave, but not during periods of unpaid leave.
If there are no standard hours, the employee and employer can agree on a notional roster.
What to do now: Start looking at your rosters. Identify where hours may need to be further defined, or where a notional roster may be needed.
Identify Additional Hours
Additional hours are hours worked over and above an employee’s standard hours.
This is where the agreement of standard working hours becomes important. Hours worked above standard will need to be paid at the base hourly rate plus 12.5%. This rate of pay is referred to as the Leave Compensation Payment (LCP).
An employer and employee can also agree to accrue PAL, Purported Annual Leave. This relates to an employer’s liability where leave is accrued instead of the employee receiving LCP.
Casual Employees
Consider reviewing your casual employees, are these genuine casuals?
Once the Employment Leave Bill becomes law, casuals will be paid the LCP rate of 12.5% on worked hours, rather than the current 8%. Alternatively, casual employees can accrue Purported Annual Leave as above.
Definition of Otherwise Working Day
Currently there is no definition of otherwise working day (OWD) within the Holidays Act. This has resulted in ambiguity around how to determine whether a public holiday was an otherwise working day for an employee.
The Employment Leave Bill sets the determination of OWD as an employee having worked on the same day of the week on at least 50% of the last 13 weeks.
Because there is no current legislation to adhere to regarding OWD, this is one of the few areas where you can configure your system now, and have the determination in place when the Bill becomes law.
What to do now: Check whether your system can automate this. If not, why not?
Parental Leave Changes
The proposed changes to parental leave will be effective for any parental leave applications on or after 1 July 2027.
This is the one change that is not effective two years after Royal Assent, it applies in a shorter timeframe. This means the configuration for parental leave will need to be updated sooner than the rest of the Bill’s provisions, and will need to work alongside the current provisions of the Holidays Act during the two years after Royal Assent.
More Detail Coming: A follow-up article on the details of the parental leave changes is coming soon.
Provision of Pay Statements
Once the new Act is in place, there will be a legislative requirement to provide employees with pay statements.
This has not been in legislation before, but it is considered best practice and most payroll systems already provide payslips. However, with the Bill defining what must appear on a pay statement, it is worth checking what your current payslip includes, and working with your software provider to add anything that is missing now.
Refer to section 130A of the Bill for the full requirements.
Obfuscation of Family Violence Leave
The Bill introduces a change to how family violence leave is recorded on pay statements.
Many organisations already obfuscate the term on payslips, but this will now be legislated. Family violence leave will need to be recorded as a non-identifiable component of the employee’s pay.
What to do now: If your system is not already doing this, now is a good time to make the change.
Remediation Under the Holidays Act 2003
Schedule 3 of the Employment Leave Bill makes provisions for a remediation process under the Holidays Act.
This means that if the Employment Leave Bill becomes law, employers cannot avoid their obligations under the Holidays Act 2003 while waiting for the Employment Leave Act to come into effect. If your system is not currently compliant with the Holidays Act, that still needs to be addressed now.
The Employment Leave Bill becoming law will not protect you from a future remediation process.
And yes, once you have addressed your Holidays Act compliance, you will then need to change again when the Employment Leave Act comes into force. However, the Employment Leave Bill does detail the calculations required to convert weeks and days into hours.
Important: If your system is not already operating in weeks and days, you will be in contravention of this part of the Bill. You will not be starting from the same platform required for the conversion as stated in the Bill.
Ready before the Bill lands?
Whether you are working through rosters, reviewing casual arrangements, or trying to understand what the Employment Leave Bill means for your systems and people, Alxemy can help you work through it.
If you would like to talk through where your organisation stands, we are happy to have that conversation.
In Summary
Waiting for the Employment Leave Bill to become law before you act is not a strategy. It is a risk. The time to get your systems, rosters, and processes in order is now, while you still have the runway to do it properly.
The changes the Bill introduces are significant. Leave accrual based on standard hours, LCP on additional hours, a legislated OWD test, parental leave changes effective from 1 July 2027, each of these has system, process, and people implications that take time to work through.
And for organisations carrying Holidays Act non-compliance into this transition, the stakes are higher still. The Bill makes clear that past obligations remain. Remediation is not optional, and the Employment Leave Act coming into force will not make it so.
The organisations that come through this transition well will be the ones that started early, stayed informed, and treated preparation as an ongoing discipline rather than a last-minute project. Start with Article 1: Holiday Act 2003 vs Employment Leave Bill if you need a grounding in the seven key changes. Then read Article 2: What Good Preparation Looks Like to build the delivery structure your team needs to transition with confidence.
Key Takeaways:
- Standard working hours — Review your rosters now and identify where hours need to be defined or where a notional roster may be required
- Additional hours — Hours worked above standard will attract a Leave Compensation Payment (LCP) of 12.5% on top of the base hourly rate
- Casual employees — Review whether your casuals are genuine. The LCP rate moves from 8% to 12.5% once the Bill becomes law
- Otherwise Working Day (OWD) — One of the few areas you can configure your system now. The test is 50% of the same day worked across the last 13 weeks
- Parental leave — Changes apply to applications on or after 1 July 2027 — sooner than the rest of the Bill. Configuration will need to happen ahead of the broader transition
- Pay statements — Check your current payslip against section 130A of the Bill and work with your provider to close any gaps now
- Family violence leave — Must be recorded as a non-identifiable component on pay statements. If your system is not doing this already, change it now
