NZ Payroll, Cash out MORE than 1 week, it's legal but not allowed in MYOB

[Phil_mtc]

UPDATE: Back in Oct 2019, Steve M advised to work around this by changing normals hours per week to 80, process the cash out, then reset.  This does work, but we're looking for a fix in the software if at all possible to match the law as stated......

Hi, on the https://www.employment.govt.nz/ website under document "Cashing-up annual holidays", the final paragraph states: "Cashing up additional holidays in employment agreements
If their employment agreement provides annual holidays in addition to the minimum four weeks, it may also provide for the additional holidays to be cashed up, for example, if the employment agreement provides five weeks’ annual holidays per year and two weeks could be cashed up, this would be allowed."

NZ Payroll has a fixed limit of "Normal Hours Per Week" to be cashed out, we have multiple employees who get 5 weeks annual leave and can therefore have 2 weeks cashed out.  Can we please modify the logic in cashed out leave to match the law.  Cashout hours available = "Annual Leave Entitlement" - 3 Weeks (the reserved amount NOT allowed to be cashed out) - Cashout Hours already paid - Simplez !

If we could have this in the next release of NZ payroll, that would solve a long standing issue we have with this.

Thanks,

Phil

[Steven_M · Accepted solution]

Hi @Phil_mtc 

While you are able to cash up more annual leave than 1 week under certain circumstances, the software has been designed to prohibit the ability to pay out that leave unnecessarily. This is to compile with the majority of cases where they are only allowed to cash out 1 week's worth of annual leave a year.

If you are needing to pay out more than one week's annual leave a year, updating the Normal Hours per Week, processing the desired pay and then updating back would be the way in which it can be completed. Although, we do recommend ensuring that you have reviewed the pay rate of that annual leave that is being cashed up and you do consult Employment NZ or a similar organisation as to whether you meet those additional circumstances 

As to whether the software will allow that functionality in the future. To my knowledge, while we are always looking to ensure that the annual leave is paid out effectively and meets the Holidays Act, I don't foresee any major changes to the Annual Leave Cashed Out code being implemented in the future of that product range.

[Phil_mtc]

Thanks Steven, OK, we'll continue using the workaround, it does introduce an issue with calculation of available leave as a change to the usual working hours prompts for a recalculation of available hours & then this is repeated when resetting the hours back to standard, it does seem to end up with a funny available hours when doing this process, but we're tracking holiday pay in a spreadsheet to ensure we are paying legally, we override MYOB calculations with our own SS calculations as we've found it's more correct over a 12 month period (due to various changes in work patterns during the year we belive). I'll start documenting the issues we have with MYOB calculations (like end of year update where carried forward $ amounts are s**bleep**ped & recalculated using the weeks & current rate resulting in a reduction of up to thousands of $ per employee in owed balances - I can see the way MYOB works follows the letter of the law but the real life impact of this end of year update is significant and open to dispute in our view hence the ss to track whats owed at all times). Cheers, Phil