What is sick leave?

Sick leave is when an employee is unable to work due to being sick or injured, or due to their obligation to care for another person who is sick or injured.  That other person must be a dependent child, a spouse, or someone otherwise dependant on the employee.

If an employee takes sick leave, they will still be paid for that day, as if they were at work. 

Employees cannot usually use their sick leave for doctor’s appointments if they are not sick, unless their employment agreement allows it, or their employer agrees.

How many sick days are employees entitled to?

Currently, employees are entitled to a minimum of 10 days’ paid sick leave per year, but only after they qualify for sick leave.  See below to find out when an employee qualifies.

Each 12 months after the day of first becoming entitled to sick leave, the employee will get a further 5 days of sick leave.  An employee can accumulate their sick leave days until they have 20 days owing.

Employees who work part-time will still be entitled to 10 days of sick leave (once they qualify), but they can only take sick leave on a day that would otherwise be a working day for them. 

Most of the time this is easy to determine where employees work regular hours.  If you are not sure if a particular day would be a day that the employee would otherwise be working, you should get advice from an employment expert. 

What is set out above are the minimum entitlements. These minimum entitlements cannot be contracted out of.  Some employees may be entitled to more sick days, based on what is set out in their employment agreements.  If you are not sure of your obligations, check the relevant employment agreement or seek advice from an employment lawyer.

The Government has introduced a proposed law which will increase paid sick leave for all employees to 10 days per year.  This is expected to become law in the second half of 2021, so make sure you keep an eye on this.

Part days of sick leave

If an employee becomes sick half way through the day, then they would be able to take sick leave and go home.  It is important to note that, unless the employer agrees otherwise, even a part day will be counted as a whole sick day.  Typically, employers will allow their employees to take part days off work when they suddenly get ill (for instance by the hour). 

When do employees qualify for sick leave? 

In order to qualify for sick leave, the employee must work continuously for the same employer for 6 months (for instance as a permanent employee, or a fixed term employee).

If the employee has not been working continuously (for instance casual employees), they will still qualify for sick leave if they have worked:

• At least an average of 10 hours per week, AND
• At least 1 hour every week OR 40 hours every month

Rate of pay for sick days

If an employee takes sick leave, they will be paid as if they were at work for that day.  Where an employee works usual hours, this is usually easy to calculate.  For instance if an employee always works 8 hours a day then they would be paid for 8 hours (known as “the relevant daily pay”).

If an employee has flexible hours or works irregular hours, then the pay would be based on the average daily pay rate.  This can be calculated as follows:

• Add up the employee’s gross earnings for a period, and
• Divide this by the number work days during that period (including annual leave days taken or public holidays taken).

Gross earnings means all payments that the employer is required to pay to the employee under the employee’s employment agreement.

Proof of sickness

An employer can ask their employee to provide evidence of their illness if they have been sick for 3 continuous days (including over a weekend).  That means an employee who is ill on a Friday through to a Monday would have been sick for 4 days, and would be required to produce evidence of their illness if required.  The cost of the proof will be the employee’s responsibility, unless otherwise set out in the employment agreement, or otherwise agreed between the parties. 

Usually a medical certificate from a doctor is sufficient evidence of illness.

Where the employer requires proof of illness for any sick leave that is less than 3 days long, the employer will have to pay for that proof.  

Sick leave during annual holidays

If an employee is already on annual leave and they become sick, the employee may instead ask their employer to treat a day as a sick day.  They employee will then be paid as if they were at work and they would use up a day of sick leave, rather than a day of annual leave. 

Unused sick leave

An employee cannot cash out their unused sick days at the end of their employment.

Employees without sick leave

If an employee has run out of sick leave, or is not yet entitled to sick leave, they can ask their employee to take sick leave in advance.  That means, once they become entitled to sick leave later, they will “pay back” their sick days already taken, by getting a reduced entitlement. 

Employers do not have to agree to let their employees take sick leave in advance.

If an employee runs out of sick leave, and has ongoing health issues, the employer may agree to let the employee use their annual leave for the additional time off work, or to take leave without pay.  If the employee has used up all of their paid leave, and the employer cannot accommodate unpaid leave, the employer may be able to take steps to terminate their employment (but only after following a fair process). 

After the proposed changes come into force, an employee would first become entitled to 10 days’ sick leave on their next entitlement date (i.e. once they meet the six month qualifying threshold, or the next 12 month anniversary of when they became entitled to sick leave).

What about injured employees – What are my obligations under ACC and Health and Safety laws?

Find out about your obligations to injured employees.

Tips for employers, to avoid them running into problems:

Make sure that you have a clear policy for sick leave in place so that staff and management know what is required of them in terms of notifying their team when they are sick, asking for sick leave, keeping accurate records, calculating pay and so on.

If you are unsure about anything seek advice, as being required to remedy mistakes can be costly.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.