Annual Leave

Cashing up annual leave

From 1 April 2011, employees may request to cash up one week of their annual leave. An employer doesn’t have to agree.

One week can be cashed-up for each ‘entitlement year’. An ‘entitlement year’ starts on the anniversary of the employee’s start date.

The employee cannot make their first cash-up request until the start of their next entitlement year, after 1 April 2011. So, if an employee’s anniversary is on 26 February, they will not be able to request cashing-up until 26 February 2012.

The main thing to remember about cashing-up is that it is an option available to the employee if the employee sees cashing-up as a benefit for them, and if the employer agrees. Cashing-up was not designed to benefit the employer – any benefit for the employer is purely coincidental.

So:

  1. An employer cannot make cashing-up a term of an employment agreement.

  2. An employer cannot even raise cashing-up in negotiations relating to wages.

  3. The employee must make their request in writing.

  4. The employer must consider the request within a reasonable time and reply in writing.

  5. The rate of payment is the greater of:

• Ordinary weekly pay or

• Average weekly earnings for the last twelve months

If the above rules are not followed, then any cash-up payment will be treated as if it had not been paid.


For Legal and Strategic Advice Regarding Annual Leave Pick Up The Phone and Talk to Workplace Law

I can offer free initial advice during the day, and after hours, to help you make sense of your situation.

Workplace Law Advice   027 270 1057         Workplace Law Quote   
mrobins@workplacelaw.co.nz