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Payroll operators call for law change following holiday pay shortfalls

The holiday pay debacle is growing as payroll operators say legislation governing payments needs to be rewritten.

Even senior cabinet minister Steven Joyce admits that some companies are struggling to comply with the law. Source: 1 NEWS

Senior Cabinet Minister Steven Joyce has also admitted some companies are struggling to comply with the law.

According to workplace unions, employees are routinely underpaid their holiday pay.

Unite has been challenging big employers about holiday pay calculations for more than a year, and in one case got back $17,000 for 60 workers.

"When the company accepted they messed this up and made a mistake they were good about it and did a calculation for our members," Mike Treen of Unite Union said.

The Government has its own holiday pay headaches at its business super ministry.

"I think some of them have found it difficult to be compliant," Mr Joyce said.

"But I think we need to be clear, the margins, it is quite small amounts."

Labour's economic development spokesperson David Clark said the Government has "sat on this issue".

"They are meant to enforce this issue and they've done nothing on it."

However, some payroll providers don’t accept the Holidays Act is the problem.

"The Act is quite simple when it comes to acquiring and accruing leave is quite simple, it’s just been completely ignored," Matthew Gardner of Smoothpay Payroll said.

However the association representing the payroll industry said the law was too complex and called for an urgent law change.