Earthquake Commission to pay 600 employees owed vacation wages

The Toka Tū Ake Earthquake Commission (EQC) has identified more than 600 current and former employees who owe vacation pay due to incorrect calculations.

The commission is the latest in a long line of employers who have had to pay thousands of employees over the past six years due to incorrect vacation payments.

EQC’s chief financial officer, Fraser Gardiner, said the miscalculation affected employees who served on the commission between 2013 and 2022.

Of the 600 employees affected, 500 were former employees, he said.

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“We are committed to paying employees the correct leave entitlements as soon as possible. Once our system is ready to process these payments, we will contact former employees directly in the coming weeks to organize this,” Gardiner said.

In most cases, he said, payments are between $10 and $100 per employee.

He said the miscalculations were similar to other leave-related pay errors previously reported from some major employers.

George Heard / Staff

The Toka Tū Ake Earthquake Commission is the latest in a long line of employers who have to pay employees due to incorrect vacation pay calculations.

The errors are largely related to the vacation pay rate. He said those who changed their hours while working at EQC between November 2013 and August 2020 were most likely to be affected.

The EQC payroll system has since been updated to address the issues.

In 2016, it was revealed that thousands of workers received incorrect vacation payments due to errors in payroll systems.

Errors occurred when legacy systems failed to handle changes in an employee’s salary throughout the year.

Vacation pay was supposed to be based on the normal weekly wage at the start of the vacation or the average weekly income over the previous 12 months. Employers must pay whatever gives the employee more money.

But many employers who used “set up and forget” systems ended up not paying enough employees.

In 2016, the MBIE Labor Inspectorate found that 24,000 employees were left out of pocket, with an average amount of $1,800.

More than 3,000 employees of the Ministry of Business, Innovation and Employment have been required to pay vacation overtime. Police paid $39 million to correct similar lower premiums for 1,500 employees.

In 2020, Flight Center was also arrested for paying less than a vacation allowance to employees.

Other New Zealand workers who have been found underpaid for years include employees at McDonald’s and Boning.

David Jenkins, chief executive of the New Zealand Payroll Practitioners Association, previously told Stuff that the rules were a “nightmare” for business owners.

“There are more than 90 different payroll systems in the country, and no national certification is required. Some companies use payroll systems developed in other countries and implement them in New Zealand,” Jenkins said.

“No wonder hundreds of thousands of workers aren’t getting paid properly,” Jenkins said.

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