Tower Holidays Act Remediation
Like a number of New Zealand organisations, through an initial assessment, Tower has identified payroll issues that mean some of our past and present employees in New Zealand may have had their leave payments calculated incorrectly.
The issues are due to challenges with the application of the Holidays Act 2003 and relate to the rate of payment for annual leave, bereavement leave, alternative holidays, public holidays and sick leave.
As a result, some employees will have been underpaid and are entitled to a remedial payment.
To ensure that our payroll system is correctly set up for the future, and remedial payments for underpayments have been identified, Tower has appointed Deloitte, who have a team that specialises in this field of expertise, to conduct a comprehensive review. Their role is to analyse all relevant payroll calculations for the period from 30 August 2013, identify changes to the system configuration and provide values for any reimbursements.
What are the issues?
The issues relate to incorrect payment calculations for bereavement leave, alternative holidays, public holidays and sick leave – known as ‘BAPS’ days and, in some cases, annual leave, leading to underpayments for some employees:
1. Payments for BAPS days
Under the Holidays Act, a Relevant Daily Pay calculation is used to determine the pay an employee would have received if they had been at work and should include payments such as overtime. The payroll system did not include overtime as part of this calculation.
2. Payments for annual leave
When calculating annual leave payments for some employees, the payroll system paid the greater of two different Holidays Act calculation amounts (either an employee’s ordinary weekly pay or their average weekly earnings). However, under the Holidays Act, a third calculation should also be considered if an employee’s ordinary weekly pay is not clear. The payroll system did not include this calculation.
We acknowledge that this is a very complex and detailed piece of work to complete to the satisfaction of MBIE, and we also want to make sure that we get it right, so based on the current estimates, we are focused on commencing payments from April 2021.
If you receive a notification that you are due a payment, then please complete the former employee form for us to be able to process the payment through the payroll system.
Frequently Asked Questions
- the issue was resolved within the system for current employees, or
- the last day of employment for ex-employees
Tower acknowledges that all payments were made in good faith. We accept responsibility for any overpayments and will not be seeking to recover those overpayments.
If you are a current employee, you will be taxed in accordance with Inland Revenues regulations, and using the tax code we currently hold for you.
Former employees will be taxed in accordance with Inland Revenues regulations using the tax code you provide to us in an IR330 form.
We encourage you to discuss with the relevant organisations how your remediation payment may impact child support, benefits or other such matters you may receive.
We have been working with an independent third party who has vast experience in this field to ensure that the configuration of the payroll system is compliant with the current legislation.