Sick leave provides employees with paid time off work when they are unable to perform their duties due to illness or injury, or to care for a sick or injured dependent [Source: Holidays Act 2003, s 65(1)]. The rules regarding sick leave, including its carry-over, are primarily outlined in the Holidays Act 2003.
Entitlement to Sick Leave
An employee becomes entitled to sick leave after they have completed six months of continuous employment with the same employer [Source: Holidays Act 2003, s 65(1)(a)].
- Continuous employment refers to an uninterrupted period of employment with the same employer, which can include certain breaks specified in the Act [Source: Holidays Act 2003, s 10].
- The entitlement also arises if, during that six-month period, the employee has worked for the employer for an average of at least 10 hours a week and at least 1 hour in every week or 40 hours in every month [Source: Holidays Act 2003, s 65(1)(b)].
Annual Sick Leave Allotment
Once entitled, an employee receives 10 working days of paid sick leave on the completion of each successive 12-month period of continuous employment [Source: Holidays Act 2003, s 65(2)(b)]. This entitlement is renewed annually.
Carrying Over Unused Sick Leave
Unused sick leave does not expire at the end of each 12-month period. Instead, it can be carried over to the next 12-month period [Source: Holidays Act 2003, s 66(1)]. This means that if an employee does not use all their sick leave in one year, the remaining days are added to their entitlement for the following year.
Maximum Accumulation of Sick Leave
There is a maximum limit to the amount of unused sick leave that an employee can accumulate and carry over. An employee is entitled to carry over up to 20 days of unused sick leave [Source: Holidays Act 2003, s 66(1)].
This effectively means an employee can have a maximum of 30 days of sick leave available to them at any one time: 10 days for the current year's entitlement plus the maximum of 20 carried-over days [Source: Holidays Act 2003, s 66(1) and s 65(2)]. For example, if an employee has 25 days of unused sick leave carried over, only 20 of those days will be available, along with the current year's 10-day entitlement, making a total of 30 days. Any amount over the 20-day carry-over limit is foregone.
Employer's Record-Keeping Obligations
Employers are legally required to keep accurate records of an employee's sick leave entitlements and leave taken [Source: Holidays Act 2003, s 81(1)(b)]. These records must be readily accessible and available for inspection [Source: Holidays Act 2003, s 81(1)(d)].
When to Seek Independent Legal Advice
Individuals seeking clarification on specific employment situations or detailed legal interpretation of their rights or obligations regarding sick leave should consult with a qualified legal professional. The Ministry of Business, Innovation and Employment (MBIE) provides guidance on employment standards, and Community Law Centres offer free legal advice.