Cashing up annual leave putting $2000 extra in some government workers' paypackets

If money is tight, cashing up a week's annual leave can deliver a lump sum to pay for a decent holiday.
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If money is tight, cashing up a week's annual leave can deliver a lump sum to pay for a decent holiday.

Figures from government departments show just how lucrative it can be to cash up one of your weeks of annual leave.

Each year every government department and agency has to account to Parliament, and that includes detailing how many workers have opted to cash up their annual leave.

The latest figures from the Civil Aviation Authority (CAA), posted on the Parliamentary website, show 28 workers will get combined cash payments of around $57,916 in the year to the end of June, or an average of just over $2000 each.

Cashing up annual leave is like giving yourself a payrise.
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Cashing up annual leave is like giving yourself a payrise.

Cashing up annual leave is tempting for anyone willing to work harder in order to fund a holiday, or supercharge their savings, or paying down of a mortgage.

READ MORE: Rob Stock: You have a secret cash source

Around 44 Aviation Security staff got combined cash payments of $71,500, at an average of $1625 each.

Under employment law, workers have a right to apply to their employers to cash up a week's leave.

Their employers must at least consider an employee's request, though they can't require workers to sell back leave to get over a staffing crunch.

Most government departments do not split out how much the cash ups cost them, instead only revealing the number of cash-ups that happen, making the figures from the CAA and Aviation Security so revealing.

New Zealand Trade and Enterprise, for example, expected to allow 18 cash-ups in the year to the end of June.

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Some agencies discourage employees from cashing up holidays.

The Transport Accident Investigation Commission says it has consistently maintained a general policy to not cash up the fourth week of annual leave, as it is entitled to do under the Holidays Act 2003 Act.

"The Commission does not expect any employees to request cashing up their fourth week of annual leave, but cannot rule this out," it said in its submission to Parliament.

HOW TO CASH UP LEAVE

The Ministry of Business, Innovation and Employment says:

  • Employees can ask to cash-up up to one week of their four weeks' minimum entitlement to annual holidays each year.
  • They can do this all at once, or can make multiple requests to cash-up until the entire one week is cashed up.
  • An employer can't pressure an employee into cashing up holidays, raise it in wage or salary negotiations, or make cash-up a condition of employment.
  • Annual holidays can't be cashed-up unless the employee asks in writing, and has completed 12 months employment.
  • An employer must consider a cash up request within a reasonable time, but may say no, and doesn't have to give a reason for their decision.
  • An employer can have a workplace policy that covers all or part of the workplace. This policy can state that they don't have to consider requests for annual holidays cash up.
  • The payment must be at least the same amount as if the employee had taken the holidays.
  • If their employment agreement provides annual holidays in addition to the minimum four weeks, it may also provide for the additional holidays to be cashed up. Someone with five weeks leave entitlement could ask to cash up two weeks.

 - Stuff

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