On 20 May, the Amendment Bill to increase minimum sick leave entitlements was given its Royal Assent. It’s a fairly straightforward piece of legislation in that it simply increases the minimum entitlement from 5 days to 10 days for most employees.
The minimum sick leave cap is still 20 days for accrued sick leave although employers can apply a higher cap if they wish. Some employment agreements provide for a higher cap; where this is the case, you must comply with the provisions of that agreement.
This new sick leave legislation takes effect from 24 July 2021, and an employee will be entitled to 10 days’ sick leave on their next anniversary date for sick leave.
What do you need to do now?
1. Review and update your employment agreements – check that your agreements cover off these recent changes:
- Increased sick leave
- Bereavement leave extended to include miscarriages and stillbirths
- The Privacy Act 2020
2. Check whether your payroll software provider is going to provide an update.
- Yes – great, hopefully you will just need to update your software
- No – you will need to ensure you manually update your employees’ entitlements
3. If you have special arrangements in place and these are reflected in your payroll, check that:
- At least the minimum requirements are being met
- Any automatic software update doesn’t override the better provisions you have in place
What does this law change mean for you as an employer?
- Increased sick leave provisions add to the bottom line cost – there’s no doubt about that. However, for most employers the change in sick leave will largely be business as usual because most employees use their sick leave appropriately.
- That being said, there are some employees who consider sick leave to be another form of holiday, whether it’s genuine or not. There are also some employees who take a lot of leave without pay – with the increased sick leave entitlement you may find that some of this leave will now be paid.
If you think an employee is flouting the rules, there is a mechanism in place to address this. Simply ask the employee for a medical certificate straight away if you have concerns. Yes, the cost is yours when you ask for a medical certificate on day one or two but it’s worth it. My recommendation is to ask for the certificate early, as soon as the employee lets you know they are not coming in.
If you feel you have a situation where sick leave is being abused, give us a call, and we can help you implement a sound framework to manage unpaid absences.