Understanding Rates and Methods for Calculating Leave
The New Zealand Holiday Act enables employers to enter into employment agreements that specify the pay rates that employees receive when they take leave time. You enter special rates using the Maintain New Zealand Special Holiday Rates program (P75Z0008).
You can specify different special rates by union code, job type, job step, or any combination of these items. You can specify special ordinary rates, which are used to calculate annual holiday leave, and you can enter special relevant rates, which are used to calculate all other types of leave. Depending upon the methods that the organization uses to calculate leave pay, you can enter special ordinary rates, special relevant rates, or both.
For example, if the organization does not use special rates to calculate annual holiday leave, it is not necessary to enter special ordinary rates. Similarly, if the organization does not use special rates to calculate sick, bereavement, or public holiday leave, it is not necessary to enter special relevant rates.
You can also specify beginning and ending dates for each record that you enter. If the employment agreement spans a specified period of time, you enter dates so that the system no longer uses the special rate once the agreement has ended. The system stores this information in the New Zealand Special Rates table (F75Z0008).
For example, the organization might have these employment agreements in place:
Agreement A states that the special ordinary rate for all employees in union 9000 is 30 NZD per hour.
Agreement B states that the special ordinary rate for all employees in union 9000 and business unit 50 is 33 NZD per hour.
Agreement C states that the special ordinary rate for all employees in union 9000 and business unit 50 and job type 8R-3 is 35 NZD per hour.
Using the previous example, you would enter three records in the Maintain New Zealand Special Holiday Rates program. The record that you enter for Agreement A acts as the default record for all employees in union 9000. Therefore, if an employee worked in union 9000 and business unit 40, their special rate would be 30 NZD per hour for annual holiday leave. Similarly, an employee who works in union 9000, business unit 40, and job type 8R-3 would also have a special rate of 30 NZD per hour.
Alternatively, an employee who works in union 9000, business unit 50, and job type A1-1 would have a special rate of 33 NZD per hour. Though this employee meets the requirements of Agreement A (union 9000), he also meets the requirements of Agreement B (union 9000 and business unit 50), which is more specific. The system assigns the rate that is associated with the most specific record in the F75Z0008 that matches the employee's information.
You must set the processing options for the New Zealand Processing Options program (P75Z002A) to use the hierarchy method if you want the system to recognize special rates when calculating leave pay rates.
In addition, to associate employees with special rates, you must populate these fields (as necessary) on the employee's Employee Master Information table (F060116) record:
Union Code
Business Unit
Job Type
Job Step
For example, if you want employees in union 1000 to receive a special rate, you must enter 1000 in the Union Code field for all employees in union 1000.