Q: We have a number of employees on fixed-term contracts of less than 12 months working variable hours. Included in their IEA is a recognition that 8% holiday pay will be paid each fortnightly pay. Does this 8% holiday pay get included as part of Gross Earnings in the RDP and ADP rate calculations? I have rung Employment NZ on 2 different occasions, got 2 different people and 2 different answers. They were then going to look into it further but never got back to me. Your thoughts would be appreciated.
A: There is nothing in the Holidays Act the expressly excludes the 8% from these calculations. For normal leave when taken it is part of gross earnings for leave going forward (Section 14) so based on that the 8% should be seen as part of gross earnings for ADP as that is a calculation based on gross earnings over 52 calendar weeks.
The 8% regarding RDP I would argue it is not part of the day. The 8% is based on the gross for the pay period not the day so would not be included in the day for the employee.