IHC | IHC Holidays Act Remediation Programme

IHC Holidays Act Remediation Programme

December 7, 2022

Organisations across New Zealand have been addressing issues with calculations of leave payment to make sure it's compliant with the Holidays Act 2003.

We have conducted a comprehensive review of the IHC payroll system which has identified that some current and former employees received incorrect payments for leave covered by the Act.

We are now doing everything we can to pay affected people the amounts they are due.

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What is the problem?

The Holidays Act 2003 is a complex piece of legislation with varying calculations and entitlements for different leave types. It covers annual leave, bereavement leave, alternative holidays, public holidays and sick leave. Many New Zealand employers have found it challenging to apply the legislation correctly when calculating leave.

In 2018 the government set up a taskforce to review and provide recommendations to improve the Holidays Act. The taskforce made 22 recommendations and these are being used to retrospectively calculate leave payments.

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What is IHC doing?

Independent experts have conducted a thorough review of our payroll. The review initially covered the period from 26 June 2012 to 25 August 2019 and identified that some of our people received incorrect payments during this time.

We have now completed recalculations for the next period from 26 August 2019 to 5 March 2023 and will be paying current and former staff any entitlements they are owed for this review period. This involves contacting our former employees and asking them to either confirm their details have not changed if they were paid in the first review period or to provide us with their details so that we can verify their identity and reimburse them appropriately.

The next steps are to develop a new system to ensure all future holiday pay calculations are correct and to calculate and make remediation payments for the period after 5 March 2023.

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Am I entitled to a payment?

Current employees

Current employees who are entitled to a remediation payment will receive it in a special pay run. You can find information about the Holidays Act remediation payment process for current employees on the IHC intranet.

Former employees

Former employees, who worked for IHC between 26 June 2012 and 5 March 2023 and are due a payment, will be contacted by NLC Payroll. IHC has contracted NLC Payroll to administer the remediation payments for former employees.

If you have received a communication with a reference number from NLC Payroll, please log onto their remediation portal - www.ess.myobpayglobal.com/ihc-remediation

If you have any questions or can’t access the portal, please email ihc@nlcpayroll.com, with your details and someone will get back to you.

If you have not heard from us but believe you may be eligible for a remediation payment, also email ihc@nlcpayroll.com.

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Logging in to the portal

1. Click 'First time logging in/reset password'.

2. Enter your reference number then click 'Submit'

3. On the ‘New Password’ page, answer the two security questions then click ‘Submit’.

4. Your new password will be displayed on this page in bold. Copy your password then click ‘Login Page’ to take you back to the ‘Sign In’ page.

5. Enter your reference number, then paste in your password and click ‘Sign In’.

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Information needed to make a payment

We need to verify the identity of former employees, including their bank account details, before we can make payment. By logging onto the remediation portal, you’ll be led through the easy-to-follow process.

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You’ll need the following information before starting:

Your IRD number
Tax code declaration form IR330 (see the second page of this form for advice on which tax code is relevant to you)
KiwiSaver deduction form KS2 (if you are currently a KiwiSaver member)
Your bank account details
Reference number from the communication we sent you
Marriage/birth/dissolution of marriage certificate if your name has changed during the period stated
Current driver licence or passport (a passport is required for anyone currently residing overseas).

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Next steps

The NLC Payroll team will verify your information and get in touch with you by email to confirm the next steps. They will let you know how much your remediation payment is and when the payment will be paid.

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FAQs for former employees

Remediation period

What period does the remediation cover?

The first remediation period is from 26 June 2012 to 25 August 2019. The second remediation period is from 26 August 2019 to 5 March 2023. If you were employed by IHC during this time, you may be entitled to a remediation payment for incorrectly calculated holidays and leave.

Payment

How much will my remediation payment be?

Remediation payments will vary from person to person. The amount depends on the individual’s gross earnings history and leave patterns. You will be able to look up your remediation payment on the NLC portal.

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What deductions or contributions will affect my remediation payment?

The remediation payment is part of your gross salary and wage earnings, so it is subject to taxation (PAYE), KiwiSaver superannuation deductions and student loan repayments (if applicable). These deductions will be based on the information provided to us via the portal.

KiwiSaver deductions will only be made if you are an existing member of this scheme. The minimum KiwiSaver employer contribution of 3% will be applied towards your remediation payment if you are a current member of KiwiSaver.

How will the remediation payment be taxed?

Your remediation payment will be taxed as a lump sum payment as required by Inland Revenue (IRD) legislation. On the ‘Former Employee Details’ form, you will need to choose the lump sum tax rate you would like deducted towards your remediation payment.

The form contains the rate options and there is more information about how to choose your rate on the Inland Revenue website.

We encourage you to contact IRD or Work and Income (WINZ) to discuss any impact your remediation payment may have on your existing benefits or child support deductions. Further information about lump sum calculations can be found on this IRD factsheet: IR1046 Calculate Lump Sum Payments.

What tax code should I use for my payment?

For advice on which tax code is relevant to you, please refer to page 2 of the Tax Code Declaration Form IR330.

When will my payment be made?

Remediation payments will be made every month as required. The NLC Payroll team will get in touch with you by email following verification of your documentation to confirm the next steps, the amount of your remediation payment and the date it will be paid. There may be a delay to your payment if some of the information you need to send is missing, incomplete or incorrect.

Will interest be paid on the amount?

No.

What happens if I do not want to claim the amount because it is too small?

Current employees will be paid the value of their remediation payment in a separate pay run from their normal pay.

Former employees may not want to claim their remediation payment because the amount owing is very small. You will be given the opportunity to proceed with the claim or to opt out.

Deceased employees/power of attorney

How do I claim on behalf of someone who has died or someone for whom I hold power of attorney?

You will need to verify your identity and that you are authorised to act on behalf of the deceased employee’s estate so that NLC Payroll can validate this information.

Please email the NLC Payroll team the details of the ‘known deceased employee’ to ihc@nlcpayroll.com. They will advise you on the next steps.

Living overseas

I now live overseas. Can my remediation payment be paid into an overseas bank account?

No. If you have received a text message confirming that you are entitled to a remediation payment, you need to have the payment made into a New Zealand bank account.

Calculations

How are remediation payments calculated?

PricewaterhouseCoopers has carried out a thorough and detailed review of holiday pay entitlements and payments made during the remediation period. They have provided IHC with a record of all remediation payments that need to be made.

Has child support been deducted from my backpay amount (if applicable)?

Child support has not been deducted from your back payment. You may need to advise IRD that your family income has changed. You can do this at any time online through myIR or you can call IRD on 0800 227 773. The IRD website has a useful factsheet on lump sum payments, e.g. arrears payment IR1046 Getting lump sum payments.

Will my back payment affect my Working for Families entitlements or disability allowance?

Your back payment may affect your Working for Families entitlement or disability allowance for the year ended 31 March 2021. Please refer to www.ird.govt.nz or call IRD on 0800 227 773 if you need further information.

Other

What if I was overpaid?

IHC is not recovering any overpayments.

What if I have not been contacted?

Not all employees who worked for IHC during the remediation period are affected. A text message or email will only be sent to former employees who are eligible for a remediation payment. They are being contacted using the contact details on record at the time of their departure from IHC.

Former employees who are not eligible for a remediation payment will not be sent a text message or email. If you do not hear from us but believe you may be eligible for a remediation payment, please email the NLC Payroll team at ihc@nlcpayroll.com.