ACC and Holiday Pay on MYOB Payroll

[SRK]

One of our staff member has been on a mix of ACC (non work related injury) and pay for 12 months.  At times she has been paid for by ACC on a work trial and at other times on abatement where we pay for what she worked, topped up by ACC.

I have entered the hours that we have paid her on MYOB Payroll, but at times she has worked hours that are on the timesheet but not in payroll because ACC have been paying her.  Below is the relevant section from the Employment NZ website.  

So if she takes annual leave we pay her at her ordinary weekly pay, but she is not actually accruing holiday pay at 8%?

An employee's annual leave is calculated as if the employee were still working.

When the employee ends their job after a period of being on ACC, the employer needs to pay any outstanding annual leave in the final pay based on gross income. The “first week compensation” paid by the employer is included in gross income. ACC compensation payments are not earnings, and are not included in gross income.

Since annual leave is calculated at the higher of the average weekly earnings for the 12 months before termination or the ordinary weekly pay, if the employee has been unpaid by the employer for over a year the average weekly pay equals zero. The employer then needs to use the ordinary weekly pay, which is the amount the employee would receive for an ordinary working week. 

Many employees will still have an ordinary weekly pay even after being off work on ACC for a lengthy period, which is normally covered in the employment agreement. If there is nothing specified in the employment agreement, then the pattern of work and payment from when the employee was last working would decide what an ordinary weekly pay is for the employee. For example, an employee who works 40 hours a week at an hourly rate of $20 per hour would have an ordinary weekly pay of $800 despite being off work on ACC for over a year. 

[jenniek · Accepted solution]

Hi @SRK 

Annual leave still accrues while on ACC because the employment is deemed continuous. However you are correct - it is accruing with no $. Therefore the average earnings for 12 months will fall below the ordinary rate of pay, and the system will pay at ordinary pay because this is greater than the average.

[SRK]

Thanks Jenni - so I just continue as I am.

She is taking some planned annual leave, so do I just use the higher of average weekly earnings or normal weekly pay.  Her hours have varied from between about 10-40 over the last year with some weeks of no earnings (except for ACC as well).

Roll on revamp of the holidays act - in situations like this it is very tricky indeed!!