Manage sick leave & domestic violence leave – Your Payroll New Zealand

All of your employees are entitled to Sick Leave (SL) of 10 days and Domestic Violence Leave (DVL) of 10 days;

after they have completed six months of current and continuous employment with you, or
if, in the case of an employee to whom the above does not apply (casual employee) they have worked for you for six months with at least an average of 10 hours per week and no less than one hour in every week or no less than 40 hours in every month during that period.

Additionally, the entitlement continues every 12 months thereafter - to be clear, it is 12 months beginning at the end of the 6 month period, NOT from employee's start date.

Importantly, the entitlement to sick leave is not varied depending on part-time or full-time employment. Every employee is entitled to 10 days’ sick leave per year and can carry over 10 days to a maximum of 20 days of sick leave a year.

Casual employee: Employment Hero Payroll now includes automated eligibility evaluation for casual employees via a dedicated leave allowance template. See the Automated eligibility evaluation for casual employees section below

Default Leave Categories

You can read more detailed information on leave categories here. By default, each business will have platform-created leave categories configured for both SL and DVL:

Sick leave and domestic violence leave

Sick leave (SL)

Domestic violence leave (DVL)

Important notes on SL and DVL setup

A few notes on the setup of both SL and DVL are as follows:

Automatically accrues based on the employee's leave year: This setting allows you to define when the employee's leave year (for this leave category) will commence, as opposed to assuming that leave will commence accruing from the employee's start date. This setting is essential for SL and DVL because the entitlement falls after 6 months of continuous employment.
Leave entitlement for leave to start after: This has been set for leave entitlement to start after 6 months from the employee's start date. This means that once the employee reaches their 6 month employment anniversary date, within the relevant pay run period that their 6 anniversary date falls within, the employee will accrue their SL/DVL entitlement in full. SL/DVL will continue to accrue in full every 12 months thereafter (i.e. 12 months from their 6 month anniversary date, NOT the employee's start date).
Standard Allowance = Standard Days per year: This setting applied for SL and DVL entitlement allowance is set at 10 Standard days per year for SL and 10 Standard days per year for DVL.
Accrue in advance: This setting is ticked because the employee is entitled to the full amount of SL (ie 10 days) and DVL (ie 10 days) when the entitlement period kicks in.
Accruals for this leave category are limited to a maximum of: This setting has been applied to cap the amount of leave that the employee can accrue in a year. For SL, this is 10 days and DVL is 10 days.
Carry over a maximum of: This setting has been applied to cap the amount of unused leave that carries over to the next entitlement period. For SL, this is 10 days and DVL is 0 days. For SL, the carry over maximum amount is in addition to the balance of leave accrued in the leave year i.e. carry over maximum is configured as 10 days + 10 days allowed per leave year = 20 days capping.

Set up SL and DVL entitlements for employees

The crucial step here for the employee's annual holidays entitlement to accrue correctly, is to ensure the employee's start date is recorded accurately in the employee's details page.

You will notice that sick leave does not accrue per pay run, this is intentional, as it is not a concept found in the Holidays Act 2003. For the first 6 months of current and continuous employment as described above, employees are entitled to an additional 10 days’ sick leave. If an employee doesn’t meet the criteria, in any year they work for you, they do not accrue any new sick leave until they meet the criteria again.

SL and DVL entitlement will automatically kick in the relevant pay run period of when the employee has reached six months after their employment start date and also the entitlement continues every 12 months thereafter. Note: it is 12 months beginning at the end of the 6 month period, NOT from employee's start date.

SL and DVL entitlement will then be included in the employee's leave balances as shown in the above example.

After the SL and DVL entitlement is allocated to the employee, you may notice in the following relevant pay run for the employee, a SL and DVL leave adjustment will display, this ensures that the maximum of 10 days for SL and 10 days for DVL has been reached for the leave year and carried over or adjusted accordingly where required. Note that SL is capped at 20 days and 10 days for DVL.

Automated eligibility evaluation for casual employees

Casual employees are entitled to SL and DVL under the same NZ employment law thresholds, but their variable hours mean eligibility cannot be assumed at the 6 month mark — it depends on whether sufficient hours were worked. Previously, payroll admins had to audit timecards manually and toggle entitlements themselves, creating compliance risk and the potential for over-allocation.

Employment Hero Payroll now includes an automated eligibility evaluation for casual employees. By assigning a casual employee to the dedicated "Casual — Eligibility Evaluated" leave allowance template, the system automatically checks eligibility on each anniversary date and applies or withholds the entitlement accordingly — no manual tracking required.

How automated eligibility evaluation works

A single leave allowance template — "Casual — Eligibility Evaluated" — covers both leave types. Sick leave and domestic violence leave are configured for automated evaluation within it; all other categories on the template are set to no entitlement. Assigning a casual employee to this template opts them into automated evaluation for both leave types at once.

On the employee's leave anniversary date, the system runs an eligibility check. If both conditions below are met, the employee receives a 10-day entitlement for each leave type. If either condition is not met, no new entitlement is granted and the employee's existing balance is preserved.

Eligibility conditions

Both conditions must be satisfied. Failing either one means no entitlement is awarded for that period.

Set up automated evaluation for a casual employee

One-time setup per employee. Once assigned to the template, the system handles every subsequent anniversary check automatically.

Go to the employee's leave settings: Open the casual employee's profile and navigate to their leave allowance template assignment.
Assign the employee to "Casual — Eligibility Evaluated": Select the "Casual — Eligibility Evaluated" template. This single assignment opts the employee into automated evaluation for both sick leave and domestic violence leave.
The system evaluates eligibility on each anniversary date: No further action is required. On each leave anniversary date, the system checks both eligibility conditions and grants or withholds the entitlement automatically.
Review outcomes in the employee's leave history: Every evaluation — whether granted or withheld — produces a record in the employee's leave history. You can review these to respond to employee queries or demonstrate compliance.

Important notes

Existing leave balances are always preserved. If an employee does not qualify in a given year, their existing balance from prior years is untouched — only the new 10-day grant is withheld.
Employees on other templates are unaffected. Only employees explicitly assigned to "Casual — Eligibility Evaluated" are included in the automated evaluation. Permanent and part-time employees on existing templates continue to be managed as before.
No hours data available. If no hours data exists for the evaluation period, no entitlement is granted and a record noting the missing data is added to the employee's leave history. You should manually review and accrue if appropriate.
The evaluation runs on the leave anniversary date. It is triggered by opening a pay run — it runs automatically on the anniversary date itself.

Further information

Pay run warnings

Within a pay run, you will notice at times a "Warnings" tab appear with a list of warnings pertaining to that pay run.

One warning of relevance here is the "employee may have missed leave entitlement".

This warning is useful as it will identify to the payroll administrator which employees may have missed their leave entitlement. A scenario where the employee may have missed their leave entitlement is if the employee is excluded from the pay run in the pay period that the leave should have been accrued in. This warning will appear in the next pay run and will display until you manually accrue the leave in a pay run for the employee.

Manually accruing leave

To manually accrue leave, within employee row of a pay run, go to 'Actions' button, then 'Accrue Leave'.

Then, from the drop-down, select 'Sick Leave' and input 10 days and, or 'Domestic Violence Leave' and input 10 days. Ensure you click on the calendar icon as shown below which will enable the yearly accrual cap. Then click on 'Save'.

It is important to note that you may require to adjust SL and DVL accordingly where you have manually added accrued SL and DVL to ensure that the employee's SL and DVL does not go above and beyond the SL and DVL cap.