|FAMILY VIOLENCE LEAVE – PAYROLL NEEDS TO BE READY IN THESE TOUGH TIMES
Author: David Jenkins, NZPPA CEO
Having seen a number of media reports on the increase in family violence from lockdown during these worrying times that we live in it is important for payroll to be ready to assist in supporting an employee when they have applied and have been approved to receive family violence leave (FVL) under the Holidays Act.
In this post I want to cover off the requirements of the act and what payroll needs to do to get it right, as that is the most important thing payroll can do to support employees facing this horrible situation. There a couple of areas I will not be covering as it is nothing to do with payroll in this post being: asking for proof from the employee (if the business does), approval or not approving FVL and what needs to go on a payslip. All of these are up to the business to decide and payroll acts on instruction provided.
Now to start I do want to state Payroll needs to be involved in FVL for the reasons stated below and it is NOT a breach of the Privacy Act! I wanted to make this statement now because when FVL was first implemented back in 2019 (called at the time domestic violence) there was a lot of rubbished about payroll should not be involved with FVL.
Why payroll must in involved in FVL:
· Payroll needs to confirm the employee’s eligibility to get family violence leave under the Holidays Act, or if they have already had it approved what is the balance of days available to the employee and when a further entitlement can be provided.
· Payroll has to calculate this type of FBAPS leave by either RDP or of the day cannot be determined ADP as the Holidays Act requires this.
· FVL is part of the Holiday and leave record an official record that must be kept for 6 years.
· Payroll needs to understand the rules and advise management or HR of what can and cannot be done with FVL as there are aspects to this leave type that are payroll focussed and need payroll involvement in how it would be applied.
Now to get it straight PAYROLL does not need to know what happened to the employee who is effected by family violence as this is nothing to do with the above. And just for all you non payroll people everything in payroll is confidential from sick leave, child support, court fines, tax and everything else and family violence is just one of many that payroll professionals deal with every day.
What are the requirements to be eligible for FVL entitlement?
For an employee to be eligible for FVL entitlement is exactly the same criteria used for both sick and bereavement leave but it is stated in a different section of the Holidays Act (section 72D).
· Criteria being 6 months current continuous employment or over a period of 6 months, at least an average of 10 hours during the period and not less than 1 hour every week or not less than 40 hours in every month.
The employee once they meet the above criteria will get 10 days of FVL. So, at 6 months the employee gets 10 days and 12 months (18 months) later they would be eligible for another 10 days. Now what makes FVL different from the other types of entitlement provided under the Holidays Act is it is a use it or lose entitlement meaning if an employee gets FVL and let’s say only uses 8 of the 10 days and then reaches their next entitlement date the 2 days does not get carried forward to the next entitlement period.
How is FVL calculated?
As with all FBAPS leave the default position is to use relevant daily pay (RDP) which is what the employee would have been paid had they worked on the day concerned (section 9). So, if the employees’ day can be defined RDP must be used. Now RDP is not just the employee ordinary hourly rate (as some payroll systems only do which should be considered totally non-compliant). For example, if the employee was paid a taxable allowance each day and then took a day of FVL the taxable allowance that is part of the day would be part of RDP. On the other side when the day for the employee cannot be determined then and only then average daily pay (ADP) can be used which is a 52-week period divided by the number of whole or part days during which the employee earned those gross earnings, including any day on which the employee was on a paid holiday or paid leave.
What is recorded in the Holidays and Leave record for FVL?
Under section 81 of the Holidays Act the following information must be recorded for FVL:
(g) the dates on which any annual holiday, sick leave, bereavement leave, or family violence leave has been taken:
(h) the amount of payment for any annual holiday, sick leave, bereavement leave, or family violence leave that has been taken:
What else does payroll need to know on FVL?
There is a unique situation under FVL involving ACC. In payroll if an employee has a work place accident the first week is paid by the employer at 80%. If the employer does not top up as they do not have too the employee can ask for a day of sick leave to top up the 80%. This is also the same for a non-work injury from the second week when ACC pays 80%.
Now there are a couple of things here and again this is a horrible situation for the employee but if an employee for example was injured in the workplace or a non-workplace as part of a family violence situation and was then unable to work from their injuries and this was assessed and coverage provided by ACC it means the employee can use FVL to top up the 80% paid by ACC. It important that only FVL can be used for a family violence situation and not FVL for just a workplace or non-workplace injury (which should be sick leave). But FVL or even sick leave could be used to top up a family violence situation on top of the 80% being paid by ACC.
So, in conclusion payroll does not need to know what happened for an employee to get FVL but payroll acts to support the employee through being professional in how FVL is provided to the employee (eligibility for entitlement), how it is calculated as per the act (RDP or if the day cannot be determined then ADP), how it is recorded and how it can be used in the situation when ACC compensation is being paid.
Just one final point as my love for MBIE is never ending. It is good to see that the super ministry (super incompetent!) finally bothered to update the Family Violence section on the Employment NZ website from domestic violence on the 17 August 2021. The act only changed from domestic to family violence on the 1 July 2019. I guess better late than never would apply but 2 years is pushing it! Useless as usual MBIE!
NZPPA supporting NZ payroll since 2007!