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The proposed Employment Leave Act is generating plenty of discussion, and it is understandable why. Changes to leave legislation can affect everything from payroll calculations and employment agreements to workforce planning, budgets and employee communications.

While the details will continue to develop, employers do not need to wait before starting their preparation. Early planning gives employers more time to understand the potential impact, make informed decisions and support their people through the transition.

We have created a practical five-step methodology to help employers prepare for the changes: Get Informed, Review, Consult, Prepare and Implement. It also provides a useful framework for the early conversations employers should be having with leadership, finance, payroll and people teams.

1. Get Informed

The first step is understanding what is changing and what it could mean for the business. 

Every workplace is different. The impact on a professional services firm may differ from the impact on a manufacturer, retailer, for-purpose organisation, healthcare provider or trades business. We recommend employers build their knowledge early so they can identify the questions that matter for their workforce and operating environment.

Getting informed may include:

• Following legislative updates and official guidance

  • Attending employer briefings and practical workshops, including those run by Unlimit, North Taranaki event, South Taranaki event

• Considering how the proposed changes could affect your workplace

  • Seeking tailored advice where the impact is complex, unclear or likely to affect payroll, resourcing or budgets

The aim is not to have every answer immediately. It is to understand the direction of change, reduce uncertainty and make confident decisions about next steps.

2. Review Your Current Position

Once you understand the potential changes, review where your business is today.

Policies, payroll processes, employment agreements and workforce arrangements often develop over many years. A structured review can help you identify what is working well, where gaps may exist and what may need to change.

Financial planning

The financial impact of leave reform can be easy to underestimate.

Changes to leave entitlements or calculations may affect:

• Leave liability balances

• Payroll and employment costs

• Annual budgets and forecasts

• Cashflow requirements

• Financial reporting and year-end processes.

We recommend employers model a range of workforce and leave scenarios rather than relying on a single estimate. This will give you better information for decision-making and helps identify practical steps before implementation costs, cashflow impacts or resourcing issues become urgent.

Workforce planning

The Employment Leave Act is not only a payroll project. It may also influence how you plan, schedule and support your workforce.

Employers should consider:

• Workforce availability and operational coverage

• Rostering and scheduling practices

• Peak periods and seasonal requirements

• Relief staffing, overtime and temporary cover

• Roles or teams where leave creates a higher continuity risk.

  
  

Looking at workforce planning alongside the financial impact gives a more complete picture. It will help you to understand not only what leave may cost, but how the business will continue to deliver services when employees take leave.

We recommend you review workforce planning early, particularly where rosters, seasonal demand, variable hours, relief cover or key person dependencies may create pressure. 

Documentation and systems

The review should also cover employment agreements, policies, leave practices, payroll settings and administrative processes. This will help identify system limitations, inconsistent practices or data issues that may need to be addressed before implementation.

3. Consult Early and Clearly

When change affects people, communication matters. Employees are likely to hear about the Employment Leave Act through media coverage, industry discussion and workplace conversations. We recommend employers plan communication early so managers, payroll teams and employees receive clear, consistent information at the right time.

A practical consultation and communication plan should consider:

• Who may be affected by the changes

• What information each group will need

• When communication or consultation should occur

• How managers will be supported to answer questions

• How employee feedback and questions will be captured

  
  

Consultation is not simply about issuing an announcement. It is about helping employees understand what is changing, what is still being worked through and what the change may mean for them.

4. Prepare Before the Deadline

Preparation is where employers can reduce the greatest amount of risk. The goal is to have people, data, documents, systems and the implementation plan ready before the new requirements take effect.

Preparation may include:

• Cleansing payroll and leave data

• Identifying missing or inconsistent records

• Testing future leave and payroll scenarios

• Reviewing and updating employment agreements, policies and handbooks

• Confirming responsibilities, milestones and decision points

• Working with payroll and HR system providers on required changes

  
  

Early preparation gives employers time to resolve issues properly, test the approach and avoid a last-minute rush.

We recommend employers turn the review findings into a clear action plan with owners, timeframes and decision points. For some, this may simply mean checking key assumptions and documents.

5. Implementation

Implementation is where planning becomes action. This stage includes rolling out updated documents and processes, applying system changes, testing calculations, supporting employees and monitoring the results.

Employers should plan for post-implementation checks rather than treating go-live as the finish line. Payroll outputs, leave balances, employee queries and operational impacts should be monitored so that issues can be identified and corrected quickly.

For some employers, the transition may also be an opportunity to address historical Holidays Act issues, validate leave records and strengthen wider payroll and people processes. We recommend employers build in post-implementation checks so issues can be identified early. 

Why Start Now?

You do not need every legislative detail to begin useful readiness work. You can already review workforce arrangements, check payroll data, assess system capability, evaluate potential financial impacts and plan how communication with employees will be managed.

Starting early provides:

• More time to understand financial and workforce impacts

• Better information for budgeting and operational planning

• More opportunity to identify and resolve data or system issues

• Reduced implementation pressure

• Clearer communication with employees and managers.

  
  

The benefit of starting now is not simply earlier compliance. It is having more choices, better information and greater control over the transition.

How Unlimit Can Help

The Employment Leave Act has implications across people, payroll, systems, operations and finance. Our People Strategy & Capability team can work alongside employers at each stage of the transition, whether the support needed is a short sense-check or a more structured readiness plan.

We can help you:

• Understand proposed changes and what they may mean for your business

• Review employment documentation, payroll practices and system readiness

• Assess financial impacts, validate assumptions and model practical budget, forecast and workforce scenarios

• Evaluate workforce planning and operational coverage

• Develop communication, consultation and implementation plans

• Support testing, implementation and follow-up.

  
  

Our role is to help employers ask the right questions early, understand the likely impact and move from discussion to practical action.

If you would like the support of the Unlimit team, get in touch