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Costs of four weeks annual leave start this year

Costs of four weeks annual leave start this year for employers

The cost increase in annual leave to four weeks takes effect on April 1st this year for employers, says David Lowe, Employment Services Manager for the Northern Employers and Manufacturers Association.

“Employers have to pay annual leave for four weeks, not three, on any leave earned by employees whose anniversary dates fall on or after April 1st 2006,” he said.

“Employees are not entitled to the extra leave or payment for it until after April 2007, but the moment they do become entitled to it their employer has to find the money dating back to their anniversary date in April 2006.

“If an employee chooses to leave their job in April 2007, their employer is obliged to pay out all their annual leave at eight per cent instead of six per cent, back dated to April 2006.

“But employees who take holidays must wait for their anniversary date in 2007 before they can begin using the extra week’s leave.

“The transition arrangements required are obviously a compliance nightmare.

“Businesses are reprogramming their payroll computer systems to deal with the next 12 months, and next year they will have to make more changes to deal with the four week’s leave after that.

“The Holidays Act 2003 was a debacle from the start; this is just another example.”

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