[New Zealand] $63million set aside to correct Holidays Act Error

Current and former school staff may be in line for a $63 million windfall as the Education Ministry works to repair problems caused by the non-compliance of its payroll systems with the Holiday Act, Stuff.co.nz reports.

More than $63million was allocated in the Budget, set aside to provide "corrective payments" to current and former teachers and other school staff who had holiday pay underpayments because the Education Ministry's payroll systems did not comply with the 2003 Holidays Act.

Widespread problems regarding compliance with the act became obvious across the public and private sector in 2017. Budget documents stated a programme was underway at the Education Ministry to calculate what was owed to whom.

Liz Robinson - Post Primary Teachers Association spokeswoman - said the funding was "good news", but felt the association had no idea whether it would be enough to cover what people were owed. "We are still in discussions with the ministry and we still have no idea of the size or scope of the problem”, she said. Adding that she believed no payments had been made so far.

Kim Shannon - the ministry's head of infrastructure - said it still didn't have a figure on what the cost of the corrective payments would be, but that Budget funding was "acknowledgement that there will be a cost to government".

The schools payroll disbursed around $5 billion each year to approximately 91,000 staff, she said. "We are currently part way through analysing areas of non-compliance and it will take some time to arrive at a reliable estimate of the cost of remediation."

The Education Ministry will receive an additional $2.6m next year to make sure that its payroll service is "compliant with legislation, employment agreements, wider education policy and assurance requirements".

The Government announced last year its intention to spend $26m on upgrading the Novopay payroll system. The system is used to pay teachers and other school staff. It is now run by Crown-owned company Education Payroll Limited (EPL).

The upgraded system - to be rebranded EdPay - would reduce the necessary number of staff EPL employed from 185 to 100 and would, according to its business case, save schools almost 100,000 hours of admin time each year.

The Ministry of Business, Innovation and Employment was allocated $17m over five years in the Budget to replace its 20-year-old payroll system with "a modern, cloud-based payroll system" to be compliant with the Holidays Act. The Government will also spend $2m on advice to ensure future payroll projects avoid pitfalls.

Budget documents said the funding will let Paul James - the Government's chief digital officer - lead a programme of work to "reduce the risks and costs of change to payroll systems across government and ensure payroll systems are future-proofed."