Leave in weeks conversion wizard

The conversion wizard takes you through the steps required to review and confirm your employee setups before we convert their annual leave balances from hours into weeks.

There are only two actions required from you before the conversion can begin.

Employees with Standard Hours

For employees with regular hours and days of work, you will be shown a list of employees whose Ordinary Weekly Pay (OWP) calculation differs from the alternative 4 week average OWP calculation as at the latest closed pay period (for more details on what this means, please refer to this Employment New Zealand OWP vs AWE chart).

Smartly will recommend the alternative 4 week OWP calculation for these employees, which you can choose to accept or choose to continue with the standard OWP calculation instead. This calculation will be used to determine the payment of annual leave after conversion.

For employees with no standard hours, they will be changed to use the alternative 4 week OWP calculation.

Employees with No Standard Hours

For employees with no regular hours or days of work, there can be difficulty in determining what a “week” is. In this situation, the Holidays Act requires that a clear agreement be reached between the employee and employer regarding the number of pay periods that should be looked over to calculate their average week.

For example, you may agree with your employee that the last 4 weeks of hours and days will determine what an average week represents for them at any given time. Every business is different, so for some employees 4 weeks may be suitable, but for others an average week may need to be calculated over a longer period.

Smartly will provide a list of these employees with the default option set to 4 weeks or the equivalent number of pay periods (e.g. if the employee is paid fortnightly, then it will be displayed as 2 pay periods). You will be required to update the averaging period for each employee as part of the conversion process.

The average hours per week determined by this agreed averaging period will be used to convert their current hours balance into weeks. If no agreement already exists with the employee regarding the averaging period to be used, then we recommend discussing this and reaching agreement with the employee before proceeding with this step of the conversion process.

Once you have completed the two sections as described above, the system will update your employees’ leave balances according to the information you have provided.

If your company has many employees, you should allow some time to complete the conversion process. A progress bar will be shown to indicate how far along the conversion process you are.

Once the conversion is completed, a Leave Balances report will be provided for you to review employees’ new annual leave balances in weeks.

The conversion wizard must be completed within two months of it first appearing when you log in. This is to allow you some time to make sure employees are all set up correctly according to their contracts before starting the conversion process. You can leave the wizard and access employee details and payroll processing functions during this time.

Each time you leave the wizard you must acknowledge that you will complete the wizard before the deadline.

If you have not completed the wizard by the set deadline, you will be required to complete the wizard when you next log in, with no option to skip or use payroll processing functions until the conversion process has been completed.

It is highly recommended that you address the two actions required of you and complete the wizard as soon as possible to avoid being unable to log into the system.

An approach based on hours worked was previously recognised as a way for dealing with employees with variable patterns of work. However, as a result of changes in interpretation by the Ministry of Business, Innovation and Employment (MBIE) in how annual leave entitlements should be treated, MBIE now advise that to reduce the risk of non-compliance, annual leave balances should be kept in weeks.

While this approach may result in differences in termination pay at the point of conversion, it ensures that the fundamental principles that underpin the Holidays Act in regards to annual leave are upheld going forward.