Earthquake Commission to pay employees owed holiday pay

The Earthquake Commission Toka Tu¯ Ake (EQC) has identified more than 600 current and former staff owed holiday pay due to incorrect calculations.

The commission is the latest in a long line of employers that have had to pay out thousands of employees over the past six years because of incorrect holiday pay payments.

EQC chief financial officer Fraser Gardiner said the miscalculations affected employees who worked at the commission between 2013 and 2022.

Of the 600 affected employees, 500 were former staff, he said.

‘‘We’re committed to repaying employees with their correct leave entitlements as soon as possible. Once our system is ready to process these payments, we will be contacting former employees directly in the coming weeks to organise this,’’ Gardiner said.

In the majority of cases, repayments would be between $10 and $100 per employee, he said.

The miscalculations were similar to other holiday pay mistakes previously reported from some major employers, he said.

The errors largely related to the rate at which leave was paid. Those who changed their hours while employed by EQC between November 2013 and August 2020 were most likely to be affected, he said.

The EQC payroll system has since been updated to address the issues.

In 2016, it was revealed that thousands of workers had received incorrect holiday payments due to mistakes in payroll systems.

Mistakes occurred when outdated systems failed to factor to changes in employee salary throughout the year.

Holiday pay was meant to be based on ordinary weekly pay at the beginning of the holiday or the average weekly earnings over the previous 12 months. Employers must pay whatever gives the employee more money.

But many employers that used ‘‘set and forget’’ systems ended up not paying staff enough.

In 2016, the MBIE Labour Inspectorate found 24,000 employees had been left out of pocket, at an average amount of $1800.

More than 3000 staff at the Ministry of Business, Innovation and Employment were required to be paid extra holiday pay. Police paid out $39 million to correct similar underpayments to 1500 employees.

In 2020, Flight Centre was also

‘‘There are over 90 different payroll systems.’’

David Jenkins

NZ Payroll Practitioners Association chief executive

caught out for underpaying staff holiday allowance.

Other New Zealand workers that were found to have been underpaid for years included staff at McDonald’s, and Bunnings.

NZ Payroll Practitioners Association chief executive David Jenkins previously told Stuff that the rules were a ‘‘nightmare’’ for business owners.

‘‘There are over 90 different payroll systems in the country, and there is no national certification required. Some companies use payroll systems developed in other countries and apply it to New Zealand,’’ Jenkins said.

‘‘It’s no wonder that hundreds of thousands of workers are not being paid correctly,’’ Jenkins said.