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Setting up holiday pay when changing an employee from casual to permanent (New Zealand)

The information in this article is intended as a guide only and it is recommended to seek legal advice before changing the employment status of an employee to determine the employer's obligations in dealing with Holiday Pay entitlements.

The following deals with how to change Holiday Pay settings within the software when an employee is moving from a casual contract where they are receiving Holiday Pay each pay period to a full time contract where the employee has a set entitlement.

If the Weeks option has been enabled, refer to White Papers regarding Holiday Pay in Weeks here. 

When an employee is changing from a Casual contract (who gets paid Holiday Pay each pay period) to a Permanent contract, terminating then reinstating the employee within the payroll is an option for dealing with this situation.

To terminate then reinstate an employee
  1. Go to the File menu > Terminate/Reinstate
  2. Select the employee and the Terminate Date being the date their Casual contract ended.
  3. Click Terminate.
  4. Go back to the File menu > Terminate/Reinstate
  5. Select the employee and the Re-instate Date would be the date on which their Permanent contract commences.
  6. Click Reinstate.

Once this process is completed, open the employees Employee Maintenance screen.

This will show that their Start Date is now the date on which their Permanent contract started and the drop down field must be changed to show Permanent rather than Casual.

Their Leave entitlements would also need to be edited to ensure that they are correct. Items such as Holiday Anniversary Date, Annual Entitlement % and Annual Entitlement Days on the Holiday Pay tab along with Sick Leave and Family Violence Leave settings should be checked and edited as required.

The system will have also created notes for both the termination and reinstatement.

If an employee is not terminated and reinstated when they are being changed from Casual to Permanent, the system will calculate holidays from their Start Date. This would mean that as soon as the employee is switched over then they will have a balance in the Accrued column, thus giving them accrued entitlement on their casual service which they had already received 8% Holiday Pay on.

This can be resolved by changing their Holiday Anniversary Date to reflect 12 months from when they changed to Permanent. This is another option for dealing with the change from Casual to Permanent and is often used in specific situations as applicable, such as when the company recognises an employees service including the casual period.

Need more help? You can open the online help by pressing F1 on your keyboard while in your software.

You can also find more help resources on the MYOB Exo Employer Services Education Centre for Australia or New Zealand.

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