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Should You Introduce Long Service Leave in Your Business?

Published April 09, 2021 -
employees working in a business with long service leave policy

Employees in New Zealand do not have a minimum entitlement to long service leave afforded to them by legislation.

This doesn’t mean that long service leave doesn’t exist in New Zealand. Some businesses – maybe yours – offer long service leave in their collective agreement or individual contracts.

What is Long Service Leave?

Generally, long service leave affords employees a specified period of leave after the employee has been employed at the same business for period of time. As employers in New Zealand are not legally required to offer long service leave, the conditions of long service leave entitlements will generally differ from business to business.

Get Help with Your Leave Management

BrightHR makes your leave management faster, easier and much more convenient.

You don’t want to waste time figuring out your various employees’ leave entitlements. BrightHR can help you:

  • Calculate leave entitlements
  • Better understand which employees are on leave, are about to go on leave, or have requested leave
  • Keep track of all employees’ remaining leave entitlements
  • Get a clear overview of an employee’s historical use of leave

Find out more.

Some Benefits of Long Service Leave

You may be wondering, if I’m not required to offer long service leave within my business, why should I?

Although long service leave could potentially be costly to your business, introducing this additional entitlement may bring many benefits. Here are some.

It Could Increase Retention

Introducing a long service leave policy could help increase retention. Employees would likely be attracted to the promise of an extended break in a few years’ time and feel their service to the company is acknowledged and appreciated.

With the understanding that they’re to receive additional paid leave once they pass an upcoming milestone, an employee may decide to stay in your business a while longer.

It Could Attract Talent

Having a long service leave policy could help present your business as caring for its employees, especially given a policy is not required. Espousing your long service leave policy to candidates could leave them with a good impression of your company.

It May Not Even Be Used

If, in your policy, you set your length of service for long service leave to ten years, it potentially may be rarely used.

The labour market has, over the last few years, trended towards work flexibility and temporary employment. According to Stats NZ’s report, entitled Survey of working: 2018:

  • One in ten New Zealanders have more than one job
  • Temporary employees account for 9% of all employees
  • Only 38% of employees have been in the same job for five or more years; 25% of employees for more than ten years.
  • The industries with the highest proportion of staff who had been in the same job for ten years or more were agriculture, forestry, and fishing (38%), manufacturing (32%), and public administration and safety (31%).

If your business is not in the industries mentioned above, if you feel that your industry has many temporary employees, or otherwise won’t see long service from employees, implementing a long service leave policy may be something rarely taken up by your staff.

If you want an easier, more accessible way of tracking leave usage amongst your staff, look no further than BrightHR. BrightHR automatically calculates all spent and available leave, allowing you to understand the status of all your employees’ leave at a glance.

Need Workplace Advice?

We hope this article has given you an initial understanding of long service leave. Want to implement a long service leave policy? Or, have an existing one and require some assistance? Employsure can help you with free, initial advice.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small- and medium-businesses, with over 5,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

This blog has been compiled on the basis of general information current at the time of publication. Changes in circumstances after publication may affect the completeness or accuracy of this information. To the maximum extent permitted by law, we disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, currency and reliability of the information on this website, and to seek professional advice where necessary. Nothing contained on this website is to be interpreted as a recommendation to use any product, process or formulation or any information on this website. For clarity, Employsure does not recommend any material, products or services of any third parties. 

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