SMEs face Holidays Act scare

Small business owners could be the latest victims of ongoing problems with the Holidays Act, with thousands of dollars potentially owed to employees.

In an email to clients on Friday, accounting software provider MYOB said issues had been identified with its IMS Payroll product which could affect some calculations, including leave rates and entitlements.

The issues were mainly related to calculations for employees with varied hours and pay, and the treatment of changes to work and leave patterns.

In some situations, leave rates or entitlements for employees may not have been calculated in line with the New Zealand Holidays Act 2003.

MYOB chief executive Greg Ellis said the company’s priority was to support its customers.

‘‘First and foremost, we recognise this comes at a challenging time for many of them.

‘‘We are undertaking an extensive programme of work to deliver product upgrades and enhancements, independent product testing, and customer support, with our dedicated support team available to assist our customers.’’

David Jenkins, chief executive of the Payroll Practitioners Association, said he had been flooded with calls from business owners saying payroll problems were the last thing they needed.

‘‘[MYOB] are talking about the experts you can contact if you think you’re affected but if they’ve got experts, they should have sorted this out years ago, not in 2020 after Covid-19,’’ he said.

‘‘They must have known about this. The act was passed in 2003 and these calculations haven’t changed since day one.

‘‘This is small and medium size businesses and this is another kick in the guts they don’t need.’’

Because the act had a six-year liability period, any problems identified now would have to be traced back to 2014, Jenkins said.

‘‘If I underpaid an employee in one period six years ago, it would affect the gross for that period and the next 52 weeks going forward.

‘‘It’s like a ripple effect going through all your calculations and that’s where you see businesses ending up with thousands of dollars owed to employees,’’ he said.

In 2018, a Government review of the act was announced after employers including McDonald’s, cinemas, security firms, and even the Ministry of Business, Innovation and Employment, were caught out by its complexities.

However, Jenkins said progress was slow and business owners would continue to run into similar issues until the act was fixed.

‘‘I’m doing back-to-back audits every day, I’ve got a team of people doing it and people contacting me every day,’’ he said.

‘‘We’ve been waiting for a report that went to [Workplace Relations Minister Iain LeesGalloway] in October last year, and that was only a report talking about the way forward, it’s not talking about the mess that’s still carrying on.’’

‘‘This is another kick in the guts [SMEs] don’t need.’’

David Jenkins chief executive of the Payroll Practitioners Association