What changed in New Zealand's employment leave law in 2026: annual leave and sick leave
The Employment Leave Act 2026 passed into law on 7 August 2026 and will replace the Holidays Act 2003 from 6 August 2028, changing how annual leave, sick leave, bereavement leave, family violence leave, public holidays and alternative holidays are earned, taken and paid (Employment New Zealand, Employment Leave Act 2026, retrieved 9 September 2026). Nothing about your current entitlements changes in 2026 or 2027; the current Holidays Act rules stay in force until the new Act commences.
The headline: a new Act, a two-year runway
The Employment Leave Act is the biggest change to New Zealand's leave law since the Holidays Act 2003 itself. Employment New Zealand (retrieved 9 September 2026) confirms the new law is designed to make leave rules simpler and more consistent for employers and payroll providers, replacing the current mix of lump-sum entitlements and multiple pay calculations with a single hourly accrual model.
| Milestone | Date | Source |
|---|---|---|
| Employment Leave Act 2026 passed into law | 7 August 2026 | Employment New Zealand |
| Current Holidays Act rules remain in force | Now until 6 August 2028 | Employment New Zealand |
| Employment Leave Act comes into force, replaces Holidays Act | 6 August 2028 | Employment New Zealand, MBIE |
| Deadline for employment agreements to be updated, or minimum statutory terms override | 6 August 2029 | MBIE |
(Employment New Zealand, Employment Leave Act 2026; Ministry of Business, Innovation and Employment, Key changes to the employment leave system, retrieved 9 September 2026.)
What changed in NZ's employment leave law in 2026?
The single biggest event was the Employment Leave Act 2026 passing into law on 7 August 2026, which will replace the Holidays Act 2003 with a new hourly-accrual leave system, but not until 6 August 2028 (Employment New Zealand, Employment Leave Act 2026, retrieved 9 September 2026). No entitlement, accrual rate or pay calculation for annual leave, sick leave, bereavement leave or public holidays actually changed for employees in 2026 itself; the current rules, covered in our annual leave entitlement and sick leave entitlement guides, still apply.
Did annual leave entitlements change in 2026?
No. The 4-week minimum annual holiday entitlement under section 16 of the Holidays Act 2003 is unchanged, and stays unchanged until the Employment Leave Act commences on 6 August 2028. What passed in 2026 was the legislation that will eventually change how leave is calculated and accrued, not a change to this year's entitlement itself. See our annual leave entitlement guide for the current rules in full.
What is the new law for sick leave in NZ?
There is no new sick leave law in effect in 2026. The current minimum of 10 days a year, with a 20-day carry-over cap, has been unchanged since the Holidays (Increasing Sick Leave) Amendment Act 2021 doubled it from 5 to 10 days on 24 July 2021 (Ministry of Business, Innovation and Employment, Increasing the minimum sick leave entitlement, retrieved 9 September 2026). Sick leave does change under the Employment Leave Act from 2028, covered below. See our sick leave entitlement guide for the current 10-day rule.
When did the 2026 sick leave law changes take effect?
There were no sick leave law changes that took effect in 2026. The last change to New Zealand's minimum sick leave entitlement took effect on 24 July 2021. The next scheduled change is under the Employment Leave Act 2026, which takes effect on 6 August 2028, moving sick leave to hourly accrual from day one rather than the current 10-day lump sum after 6 months.
Do the 2026 leave law changes apply to part-time employees?
The Employment Leave Act 2026 will apply to all employees, including part-time and casual workers, once it commences on 6 August 2028. Under the new hourly accrual model, leave builds up as a proportion of hours actually worked, which the Act's own explanatory material presents as fairer for part-time and variable-hours employees than the current system, where entitlement depends on reaching a 12-month or 6-month milestone regardless of hours worked (Ministry of Business, Innovation and Employment, Key changes to the employment leave system, retrieved 9 September 2026).
Where can I check the latest NZ employment leave law updates?
Employment New Zealand's Employment Leave Act 2026 page and the Ministry of Business, Innovation and Employment's Holidays Act reform page are the two official sources for guidance as it is published over the two years before the new Act commences (both retrieved 9 September 2026). We update this page annually to reflect the latest confirmed timeline.
What actually changes from 6 August 2028
The Employment Leave Act rewrites the mechanics of every major leave type. The table below is MBIE's own summary of the current system against the incoming one.
| Leave type | Current system (Holidays Act 2003) | New system from 6 August 2028 |
|---|---|---|
| Annual leave | 4-week lump sum after 12 months' continuous employment | Accrues in hours from day one, at a minimum 0.0769 hours per standard hour worked |
| Sick leave | 10-day lump sum after 6 months, up to a 20-day cap | Accrues in hours from day one, at a minimum 0.0385 hours per standard hour worked, up to a 160-hour cap |
| Bereavement and family violence leave | Applies after 6 months, taken as full days | Applies from day one for all employees; part days can be taken on the same days as sick leave |
| Public holidays | Paid on an "otherwise working day"; not always clear for irregular workers | New test: a day counts if 50% or more of that weekday was worked in the preceding 13 weeks, for employees without agreed days |
| Alternative holidays | A whole day off for working any part of a public holiday | Accrues in hours, at 1 hour of alternative leave for each hour worked on a public holiday |
| Leave pay | Multiple calculations (OWP, AWE, RDP, ADP) depending on leave type | A single hourly rate, based on the employee's lowest hourly rate for the shift, for all leave types |
| Casual and additional hours | 8% pay-as-you-go for genuinely irregular work | A leave compensation payment of 12.5% of ordinary hourly rate on casual hours and additional hours beyond standard hours |
(Ministry of Business, Innovation and Employment, Key changes to the employment leave system, retrieved 9 September 2026.) Employers can always agree to better terms than these new minimums; they cannot agree to worse ones.
How will annual leave accrual actually work under the new law?
Instead of a single 4-week block granted on your 12-month anniversary, annual leave will accrue continuously from your first day of employment, at a minimum rate of 0.0769 hours of leave for every standard hour worked, and will also accrue during most paid and unpaid legislated leave, such as parental, volunteer or jury leave (Ministry of Business, Innovation and Employment, Key changes to the employment leave system, retrieved 9 September 2026). It will not accrue on unpaid leave outside those categories, or while receiving accident compensation. Our annual leave entitlement guide covers the current lump-sum system that still applies until 2028.
Will I lose annual leave I've already banked when the law changes?
MBIE has not published the exact conversion mechanics yet; Employment New Zealand says employers will need to convert existing leave balances to the new hourly system when it commences, and has committed to publishing detailed guidance on this before 6 August 2028 (Employment New Zealand, How employees can get ready for the changes coming in 2028, retrieved 9 September 2026). In the meantime, keeping your own payslips and leave records is the practical step Employment New Zealand recommends.
Does the new law change how much annual leave I cash up?
Yes, eventually. Once the Employment Leave Act applies, employees will be able to request to cash up to 25% of their annual leave balance in each 12-month period, measured from their last start-date anniversary, replacing the current flat 1-week cap (Ministry of Business, Innovation and Employment, Key changes to the employment leave system, retrieved 9 September 2026). This does not apply until 6 August 2028; our cashing out annual leave guide covers the current 1-week rule.
Does this change public holiday pay?
Yes, for a specific group of employees. A new "otherwise working day" test will apply to employees without agreed days, or a pattern of days, of work in their employment agreement: a day is treated as an otherwise working day if 50% or more of the same weekday was worked in the preceding 13 weeks (Ministry of Business, Innovation and Employment, Key changes to the employment leave system, retrieved 9 September 2026). See our public holiday pay guide for the current test.
Does long service leave change under the new Act?
No. Long service leave has never been a statutory minimum, and the Employment Leave Act does not create one. It remains entirely a matter for individual or collective employment agreements, exactly as it is now; see our long service leave guide for how it currently works.
What should employees actually do to prepare, right now, in 2026?
Employment New Zealand's own guidance is that employees do not need to do anything right now: the new law does not start until 6 August 2028, giving employers and payroll providers a two-year window to update systems, agreements and policies (Employment New Zealand, How employees can get ready for the changes coming in 2028, retrieved 9 September 2026). The one practical step worth taking now is keeping accurate copies of your own payslips and leave balance records, so any conversion to the new system in 2028 can be checked against your own history.
Can my employer make changes to my employment agreement because of this Act already?
Not unilaterally. If your employer wants to update your employment agreement ahead of the new law, for example to reflect new hours-of-work wording, they must discuss the proposed changes with you first, give you a copy of what is proposed, allow time to get advice, and consider compromising on terms you are not happy with (Employment New Zealand, How employees can get ready for the changes coming in 2028, retrieved 9 September 2026). Any better terms than the new law requires can be agreed; nothing worse than the statutory minimum can be imposed.
Where to read the current rules
Until 6 August 2028, every entitlement in this cluster runs on the rules the Holidays Act 2003 has used for years. This page will be updated annually as MBIE and Employment New Zealand publish further guidance.
| Current entitlement | Guide |
|---|---|
| Annual leave (4 weeks after 12 months) | Annual leave entitlement in NZ |
| How annual leave pay is calculated | Annual leave pay calculator explainer |
| Cashing up annual leave (1 week a year) | Cashing out annual leave in NZ |
| Public holiday pay and alternative holidays | Public holiday pay in NZ |
| Long service leave (not a legal minimum) | Long service leave in NZ |
| Sick leave (10 days after 6 months) | Sick leave entitlement in NZ |
| Bereavement leave (3 or 1 days) | Bereavement leave in NZ |
The leave entitlements hub indexes every guide in this cluster. If a job change or redundancy is the reason you are checking your entitlements now, our redundancy pay in NZ, notice periods in NZ and the first 30 days after redundancy guides cover what applies on top of your leave balance, both under the current law and unaffected by this reform until 2028.
Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. Start a free comparison if you would like a licensed adviser to review your own cover ahead of any workplace changes.
Adviser's view
QuoteHub's read is that the most common mistake right now is panic about a change that has not happened yet: nothing about your leave entitlement, accrual or pay changes in 2026 or 2027, and the practical planning window most employees actually need starts closer to mid-2028, once employers begin updating agreements.
Compare your cover with a licensed NZ adviser · free, no obligation.
Cite this page QuoteHub NZ (2026). NZ Employment Leave Law Changes 2026: What's New. www.quotehub.co.nz/guides/leave-entitlements/employment-leave-law-changes-nz. Updated 2026-09-09.
References
- Employment New Zealand: Employment Leave Act 2026
- Employment New Zealand: How employees can get ready for the changes coming in 2028
- Ministry of Business, Innovation and Employment: Holidays Act reform: Employment Leave Act
- Ministry of Business, Innovation and Employment: Key changes to the employment leave system (PDF)
- Ministry of Business, Innovation and Employment: Increasing the minimum sick leave entitlement
- Beehive.govt.nz: More sick leave to support employees on the way
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Compare Insurance NZ.