Tuesday, 4 February 2020
Holidays Act Remediation
Holiday Pay Remediation Payments
We are currently addressing payroll system compliance issues relating to the Holidays Act 2003 to ensure all current and former Ravensdown employees received their correct Annual leave payments.
- How it affects you?
- What you can do
- Timing of remediation payments
- Consequences for tax or benefits
- More information
How it affects you?
If you were employed by us at any point since 1st October 2012 and received an incentive payment, your annual leave may not have been calculated and paid correctly.
What you can do
If you think you may be affected, email us at firstname.lastname@example.org
We will confirm your details and let you know whether or not a payment is due to you, and what the next steps will be.
Timing of Remediation Payments
To pay you, we first need to confirm and verify your information, which will take us some time. Contact us as soon as possible, so we can confirm if you are affected, and then we can verify with you if there have been any changes to bank account details or tax code and arrange payment if eligible. Please be advised we can only make payments to a New Zealand-based bank accounts.
Consequences for tax or benefits
We encourage you to contact the relevant organisation such as Inland Revenue for advice about whether your remediation payment affects any agreement you have with them in terms of your current earnings, benefits, child support or any other matters.
The Inland Revenue website has useful information on the tax treatment of lump-sum payments such as an arrears payment here.
You can also contact the IRD directly on 0800 227 774.
We update our FAQs regularly. If you have any further questions, please email us at email@example.com
What is the Holidays Act?
The Holidays Act 2003 sets out how payment for leave and final pays are to be calculated and paid.
What is the issue?
Compliance issues with the Holidays Act have been identified recently in both the public and private sectors because many payroll systems have not aligned with the Act. So, like many other organisations, Ravensdown has conducted a review to see whether holiday pay was calculated correctly for its employees. This review was supported by Price Waterhouse Coopers (PwC) and it was recommended that the incentive payments should have been included in the annual leave calculations.
We are working to fix this by calculating and making remediation payments to anyone who has been incorrectly paid.
How far back will remediation payments go?
We are required to go back six years from the date of a claim or six years from the date that Ravensdown became aware of the Holidays Act issues. As we became aware of potential issues in late 2018 calculations will start from the beginning of the first pay period in October 2012.
Will all employees receive remediation payments?
Only employees who have received incentive payments which were not factored into the annual leave calculation at the time and have actually taken annual leave will be eligible for remediation payments.
If employees are entitled to remediation payments, how much will it be?
The amounts will vary depending on the circumstances for each individual staff member e.g. their length of service, incentive payments & annual leave taken/paid during the period.
Has anyone been overpaid?
Yes, however, in line with other organisations and in consultation with our Unions, Ravensdown has decided there will be no action to seek recovery of overpayments.
If employees are entitled to remediation payments, when will they receive them?
We need to finalise and confirm calculations before any remediation payments are made.
Payments will be made on the last working day of each month once calculations are complete, your documentation has been checked and verified. e.g. Documentation verified 6th Feb 2020, payment would be 28th February 2020.
Is Ravensdown engaging with Unions?
Yes, Ravensdown is engaging with Unions. We have kept Unions informed on the approach we have taken and welcomed ongoing input to make sure we identified and resolved the project challenges and issues along the way.
How long has Ravensdown known there were issues with the annual leave calculation?
We became aware there were issues in 2018 and since then have:
- Verified the issues in October 2018
- Established a project plan and project team supported by PwC to investigate the issues and make recommendations to the Leadership Team about how to manage any under or overpayments for the past six years due to the incentive not being included in annual leave calculations.
- Sought legal and subject matter advice internally and externally
What do I need to do to receive remediation payments I’m owed?
Please email the information requested in your letter and we will let you know if you are affected or not.
The further documentation required includes an IR330 and KS2 form based on your current situation. If you have changed your bank account number or name, we will need formal verification of these changes. Once this information has been collected, updated and verified in our system and payment amounts finalised, payments will be made on the last working day of each month.
How was my remediation payment calculated?
A Calculation Model was created to calculate the amount payable for everyone based on the assumptions and historical payroll data. The Calculation Model has been formally tested to ensure it calculates in accordance with the assumptions and it was subjected to an independent review from Price Waterhouse Coopers (PwC).
As a result of this work, we have been able to determine the amounts individuals are owed for Holidays Act remediation payments.
In addition to this work, and prior to making a payment, we are manually checking the calculation of the amount owed to an employee.
Why is my remediation payment different to others?
Individual circumstances can result in different amounts owing for similar employees because of differences in incentive payment amounts, hours of work, when and how much annual leave was taken and any periods of unpaid leave.