Sick leave changes explained

Tomorrow, the minimum number of sick leave days that employees are entitled to will double from five to 10.

It was one of Labour’s campaign promises during the 2020 election, and changes were proposed after the Covid-19 pandemic highlighted the importance of workers staying at home when sick.

Here’s what you need to know about the changes.

Not all employees will get the sick day boost at the same time.

From tomorrow, employees become entitled to 10 days’ sick leave on the next anniversary of their ‘‘entitlement date’’. That is the date they became eligible for sick leave. At the moment, that’s usually six months after a person starts with their employer but it has been recommended that sick leave be made available to new employees immediately.

Employees who have not yet got to that point will be eligible for 10 days’ sick leave when they reach their entitlement date.

But employees who are already entitled to sick leave will only get their extra five days the next time the anniversary rolls around.

So if from tomorrow you have been employed for seven months, you will have to wait another 11 months until you are eligible for the extra five days of sick leave.

How will it work?

The 10 days applies to all employees, whether they work fulltime or part-time.

It is paid at a rate equivalent to what an employee would have been paid on the day they are off sick.

Employees who are not sick themselves can use their sick leave to care for a sick or injured spouse, partner, child or dependent individual.

While the number of days of sick leave has doubled from five to 10, the maximum sick leave an employee can accrue will remain at 20 days.

Almost half the workforce will have their sick leave doubled as a result of the changes. Research showed that in 2019 47.5 per cent of Kiwi businesses offered employees the minimum of five days.

MBIE estimated the cost of the increase to be approximately $958 million per year, which is equivalent to around 0.9 per cent of the country’s total wage bill.

Will I have to supply a doctor’s certificate?

Your employer can ask to see a doctor’s certificate after you have been sick for three consecutive days.

An employer can ask to see a certificate before three days have passed, but only if they cover the cost of a medical assessment.

The employee gets to choose which doctor they visit.

If an employee is asked to provide a medical certificate, and they do not, the employer does not have to pay them their sick leave.

What do employees need to know?

Megan Vant, senior associate at Dundas Street employment law firm, believes that because Covid-19 has normalised working from home, employees could potentially use less of their sick leave.

‘‘Yes, we are being given more sick leave, but at the same time we may use less sick days because we would rather work from home in our pyjamas and under a blanket,’’ Vant said.

This could erode the worker’s right to sick leave, and it was employers’ role to make sure the boundaries were clear, Vant said.

‘‘It is incumbent on employers to make sure that they are not expecting sick employees to work simply because working from home is an option,’’ Vant said.

Ben Peterson, national coordinator for First Union, said that the increase to sick leave was overdue but left more work to be done.

‘‘It is important to improve sick leave, but we need to make sure we improve realistic access to it,’’ Peterson said.

Part of improving access to sick leave was improving work cultures, he said.

‘‘Sick leave is only part of the picture. We also need to have a look around our work cultures and providing an environment for safe staffing.’’

What do employers need to know?

Kirk Hope, chief executive of Business New Zealand, said that businesses needed to be prepared for staff to take the extra five days off sick.

‘‘Our data suggests that people take their sick leave right up to the entitlement level, which is probably the right thing to do in a Covid-19 environment,’’ Hope said.

Data from Southern Cross and Business NZ showed on average, people took 4.7 of their five sick days each year.

Hope said Business NZ had sympathy for employers worried about the extra cost these days will bring.

‘‘This is a contingent liability for businesses. If people take their maximum leave, that is effectively doubling the cost of sick leave at a time when some businesses are continuing to struggle,’’ Hope said.

Hope said the increase in sick leave was an opportunity for employers to talk to their employees about how they used their leave.

‘‘We would encourage businesses to have conversations about being judicious with their sick leave, because we don’t know if the variants might get in, we don’t know if we could have another outbreak,’’ said Hope.

Vant believed the extra five days were necessary, for staff to be properly looked after.

‘‘It is hard for small businesses, but it is just one of those things you have to factor into the cost of doing business. You have to look after your staff,’’ said Vant.

Which industries will be most affected?

According to MBIE, employers in hospitality, retail, manufacturing and construction are more likely to only provide the minimum entitlement, so are most likely to be affected by the increase.

Matt Stenton, programme director at Go Tourism, said while hospitality and tourism were likely to be impacted by the changes, it was worth it.

‘‘Yes, this is going to be a cost of more days that a business will need to cover. But if we look at it as a measure to look after our own people we should support the changes,’’ Stenton said.

Peterson said the retail sector was particularly susceptible to issues around sick leave because it was already facing staffing shortages.

‘‘There is a big pressure on retail workers either directly or indirectly that you not being there puts a lot of strain on your co-workers. We know that this creates a culture of people just sucking it up and going to work anyway,’’ Peterson said.

Peterson said employers needed to make sure their employees were confident enough to correctly use sick days.

‘‘Employers need to make sure people use these days when they are sick. Most important is for employers to make sure there are adequate staffing levels so the place doesn’t collapse when people call in sick,’’ Peterson said.

How does NZ compare to the rest of the world?

Before these changes were made, New Zealand was ranked 14th in the OECD for the number of sick leave days.

The country with the lowest allocation was the USA. Staff there do not have any legal minimum paid sick leave. That country is closely followed by the UK, which offers 1.1 days.

After the changes come into effect, New Zealand will join Australia, Switzerland and seven other countries in the OECD with 10 days or more of sick leave.

Luxembourg has the most paid sick days with 77.