There were several issues that affected the calculation of gross earnings used for the calculation of leave as follows:

ALLOWANCES

This related to allowances that were paid tax free and therefore was not included in gross earnings for inclusion in the holiday pay calculation.

Whilst the majority of these allowances were made up of Zone travel allowance, there were also overnight, and appreciation payments as well.

OWP1 (ordinary working pay) rate for annual leave

This was often paid at the ordinary rate of pay and incorrectly did not include regular allowances in this rate.

OWP4 (ordinary working pay) average last 4 weeks rate for annual leave

This was not considered at all in any holiday pay calculations for wages and may have resulted in underpayments.

AWE Rate (Average Weekly Earnings ) rate for annual leave

The configuration of this rate was incorrectly as it did not always recalculate the last 12 months earnings correctly.

BAPS (Bereavement, Alternative, Public Holiday and Sick leave) Daily rate

There were 2 main issues as follows:

• Average Daily Pay (ADP) rates used for waged employees did not always calculate the Average Daily Pay correctly.

• Rates also needed to be recalculated due to the missing allowances that had not been included in the rates.

ACCUMULATORS

The payroll system works on the basis of days paid and hours paid.

The resulting payroll calculation forms the building blocks for all leave taken.

In some cases there were hours and/or days missing from the gross payments.

In short, the payroll system was setup incorrectly and this project has been completed to correct all those mistakes to ensure that you have not been underpaid

The following employees paid through these payroll groups were affected:

• Kono Horticulture Weekly Payroll

• Kono Weekly Payroll 

• Wakatū Weekly Payroll

• Wakatū Monthly Payroll

However, not all employees have a backpay as they may not have had additional allowances and the leave rates that were calculated  may have been correct.

Due to earnings history and leave patterns being unique, every case has been assessed individually; therefore, each payment amount will be different.

The period remediated will provide backpays covering the identified issues between 1 January 2013 to 31 December 2018.

This is a period of 6 years.

From the above date the payrolls systems have been corrected and are operating and paying leave according to the holidays Act 2003

We appreciate that it has taken time to determine and process the back payments.  The Holidays Act is a complex piece of legislation to apply and unfortunately many organisations have had challenges in doing so.

Once the issues were identified, we undertook a thorough investigation because we wanted to ensure that all our employees have been paid their entitlements and a robust process has been put in place to ensure payments from the above date are correct.

The following methodology was adopted for this remediation exercise.

1. A payroll model was built that replicated the required leave calculations as required by the Holidays Act 2003

Rate Calculations:

• OWP1 calculated rate for the previous week that included all ordinary pay and regular allowances

• OWP4 calculated rate is the average weekly pay of employees ordinary pay plus regular allowances over the previous 4 weeks.

• AWE calculated rate is the average weekly rate over the:

- last 52 weeks

- If less than 52 weeks (incomplete first year) then the number of weeks earnings divided into the earnings over that period.

- ADP calculated rate being the average daily pay being earnings over:

- The last 12 months divided by the number of whole or part days or

- A period less of than 12 months (incomplete first year) whereas the total earnings are divided by whole or part days.

2. All payroll transactions for the recalculation period were downloaded into the model

Data Processing:

• Missing data such as days and hours were updated so accumulators could measure leave calculations accurately

• Allowances that were not included in gross earnings were added correctly into gross earnings for calculation of all leave

• All data was directed into the correct pay periods

3. Every pay for every employee was recalculated

4. Every instance of underpayment is owed to each employee.

5. Any overpayment that was identified in this calculation was ignored and not deducted from what was owed to employees except where employment for an individual was less than 12 months which meant that 8% of total gross earnings less what was paid at termination became the ceiling.

6. Where appropriate 8% holiday pay was added to underpayments.

7. All termination pays were re-reconciled to ensure they were correct.

There are many reasons why you may not have been contacted that include the information that you supplied at employment and updated during your employment:

1. The mail address on file is invalid

2. Your email address no longer exists

3. Your cell phone is no longer operating, or the number has been reissued.

The company will be using the above contact details plus social media to contact you if you have a back-payment.

Your backpay will include all overpayments plus holiday of 8%

You need to pay tax on any back-payments, and It’s important that you state your tax rate on the IR330 form when you complete your verification documents, so you are taxed correctly.  A form will be provided to you, to support the back-payment process.

Please read the IR330 as its also a guide to the above as this includes your declaration code if you have a student loan.

The above declaration is for the 2025 tax year (April 2024 – March 2025) so take that into consideration when you are completing the above.

If you are a KiwiSaver member your back payment will be less your KiwiSaver/employee superannuation contribution.  

You will also receive the company contribution. If you are a current employee your current status will happen automatically, but if you are a former employee you need to provide your KiwiSaver information as part of completing your verification forms.  

Please fill in the KS2 kiwisaver form if you want this deducted.

Once we receive and verify your documentation including your current back account and tax code, your back payment will be processed and deposited into your nominated bank account account within a month of all documentation being verified. If we need more information from you to process your claim, we will get in touch.

Remediation of employees will commence in 2024.

We need to verify your identity and confirm that you are authorised to act on behalf of the estate or person before processing any back payments.

If you believe you may be entitled to a back payment on behalf of an estate or a person for whom you hold power of attorney, please get in touch.

payroll@wakatu.org

If you are a current employee, we will be using the bank account we have on file for you, where you receive your wages.

If you are a former employee, you are asked to provide your bank account details when you complete your verification form to ensure the back payment goes to the right place.

Remember that we cannot be responsible for any errors that you make when entering the bank details so please do this carefully.

If you now reside overseas and supply an overseas bank account, Wakatu may deduct the international fees that will be required to remit these funds to you.

After 5 years Wakatu will transfer any backpay over $ 100.00 in a tax year to IRD where it will be kept in ‘ Unclaimed Monies’.

You may contact IRD at any time after its transfer to recover these funds.

You can go to ird.govt.nz and enter unclaimed monies in the search engine on the main page.

This will take you to the unclaimed monies database where you will need to follow the prompts they have.

Backpays less than $ 100.00 in a tax year will be held by Wakatu and you should email payroll@wakatu.org

These arrears calculations have been recalculated by Payroll consultants, audited by PwC, and reviewed by Wakatū management.

If you believe there is an error with your remediation, you can contact us via email on payroll@wakatu.org. You will need to include why you believe your remediation is incorrect in your email.

We will review and respond to your enquiry once we have completed processing payments to the employees we have identified.

Also please remember that these arrears calculations have been recalculated by Payroll consultants, audited by PwC, reviewed by Wakatū management.

Please write to us and request forms. Please also include a phone number in your letter, so that we can contact you.

Payroll Team
Wakatū Incorporation
P O Box 440
Nelson
Aotearoa

Please include the following information:

1. IRD number

2. Contact details (email address and phone number)

3. Driver’s licence, passport number, certificate of citizenship, immigration NZ Visa or birth certificate

4. If you do not have any of the above identification you will be contacted to obtain alternative identification measures