Fulton Hogan has identified payroll related issues due to the complexity of the Holidays Act alongside our dynamic workforce which, over time, have resulted in some staff receiving incorrect payments.

The issues relate to entitlements under the Holidays Act 2003, and how a range of allowances and entitlements have been interpreted and calculated. The specific areas that require remediation date back to 2010, and are primarily related to the payment of statutory holidays, and the rate of payment for annual, sick and bereavement leave.

This is a broadly nationwide issue which involves many different organisations across multiple industries. Fulton Hogan has been proactive to date and are now closing in on a solution.

Complexities generally arise in two areas of the Holidays Act:

1. Payment calculation rules for annual holidays.
2. The method of calculation for bereavement leave, alternative holidays, public holidays and sick leave.

Problems can arise with the method used to calculate the payment owing to an employee, as there are different ways of calculating what should be paid for a specific day/week of leave or holidays.

Ordinary weekly pay, average weekly earnings, relevant daily pay and average daily pay are the calculations that are used depending on the type of leave that is taken. If the incorrect method of calculation is used it can result in an overpayment or an underpayment to an employee.

Calculations are made difficult as the Act refers to annual holidays being paid in weeks, whilst other leave types (bereavement leave, alternative holidays, public holidays and sick leave) are paid in days.
Employers will often accrue, calculate and pay holidays and leave taken in hours to allow smaller quantities of time off to be taken by an employee (i.e. half day = 4 hours).

Calculation errors can also happen when employees receive additional allowances, work regular overtime or their hours vary day-to-day or week-to-week.

The issue affects some individuals who are, or were, previously employed by Fulton Hogan from 2010.

Not all employees who worked during this period are affected, as there will be instances where holiday pay was calculated correctly or at a higher rate.

We are currently working through the final stages to identify both past and present employees who have been affected.

Due to the fluctuation of earnings history and leave patterns for our business, every case has been assessed individually; therefore, each payment amount will be different.

Fulton Hogan will be writing to each current and former employee to advise of the money they are owed. If you believe you are eligible and have not been contacted by 28 September 2018, please call 0800 34 4277 or email payrollmanager@fultonhogan.com

The dates the first phase of remediation calculations were completed for were 01 May 2010 through to 31 October 2016.

There are further phases that will cover the remaining timeframe.

We appreciate that communication first went out in early in 2017, and it has taken some time for us to investigate, recalculate and process remediation payments.

With over 10,000 employees to be taken into consideration as part of this process, we want to ensure that the remediation payments are correct the first time around, so there is no backtracking or further recalculations over the specified period.

We are working hard in preparing and now verifying our calculations to ensure correct payments.

Fulton Hogan acknowledges that all payments were made in good faith. We accept responsibility for any overpayments and will not be seeking to recover those overpayments from staff.

All remediation payments will stay with Fulton Hogan for a period of 6 years from the 28 September 2018. If the payments are not claimed within this 6 year period, they will then go to IRD as unclaimed monies. This will then need to be claimed and processed through IRD.

If you are a current employee with Fulton Hogan, we don’t require any documentation from you in regards to any remediation payments.

For former employees, to enable us to make payment we will need the following documentation from you:

• Proof of Identity: birth certificate, passport, certificate of citizenship, immigration NZ Visa, drivers licence, or HANZ 18+ card
• Tax Code and IRD number: a signed IR330
• If contributing to KiwiSaver a signed IRD KiwiSaver Deduction Form (KS2)
• Bank account details for payment: Proof of Bank Account information is required

The recalculation files are incredibly complex and detailed, involving large quantities of data, therefore, the full breakdown will not be provided with the letter detailing the amount of your payment.

Should you require this full breakdown of your calculations, we can provide this upon your request.

If you finish with Fulton Hogan and you have already received a payment letter, we will make this payment into your final pay bank account unless otherwise notified.

Before we can make any payments in these scenarios, we are required to verify the executor of an employee’s estate or their power of attorney.

If you have received confirmation of a remediation payment or believe you are entitled to a remediation payment under this situation, please contact us to discuss this further.

As the remediation payment forms part of an earnings payment, the following deductions/ contributions will impact this payment:

• PAYE (Tax)
  • Which will be at Extra Tax
• Student Loan
• KiwiSaver – if you are a current KiwiSaver member

Additionally, with KiwiSaver, Fulton Hogan will provide the legislated employer contribution as required.

We have looked at all the different scenarios for our employees, both former and current, and ensured these were considered across the recalculation process.

We have covered off:

• Moving from Waged to Salaried (or vice versa)
• Changing between Full Time, Part Time or Casual (including fixed term)
• Periods of Parental Leave
• Transferring between New Zealand and Australia (and vice versa)
• Transferring between New Zealand and Fiji (and vice versa)
• Career Breaks

In this situation there are two possible scenarios:

1. You have left Fulton Hogan and been employed back on the same employee number
2. You have left Fulton Hogan and been employed back on a new employee number

In both scenarios, this has been taken into consideration and the recalculations have been based on each situation. If you are entitled, you will still only receive one payment amount, which will be a consolidation of the calculations.

We have been working through a review of our current payroll system and setup, alongside considerations of the complexity of our workforce, to determine the best approach for any potential changes.

As our first phase consisted of a specific calculation period from 01 May 2010 through to 31 October 2016, there will be future calculations once we have implemented our required system and process changes. We will ensure regular communications regarding progress of the Holidays Remediation Act Project are sent out as required.

If you have any further questions or concerns please feel free to contact the project team on payrollmanager@fultonhogan.com or 0800 FH HARP (0800 34 4277).