Can my employer make me take annual leave? Closedowns and directed leave in NZ

The short answer

Under section 18 of the Holidays Act 2003, when you take your annual holidays is something you and your employer agree. Your employer must not unreasonably refuse a request, must let you take your holidays within 12 months of them becoming due, and must let you take at least two weeks in a row if you choose.

Section 19 sets out when your employer can decide for you. There are only two cases: you cannot reach agreement about when you will take leave you are entitled to, or there is a closedown under the closedown rules. In both, you must get at least 14 days' notice. The Act does not say the notice must be written, but ask for it in writing so the dates are clear.

Your employer cannot make you take leave in advance, before you are entitled to it. Leave in advance is something it may allow by agreement (s 20). And if your workplace closes unexpectedly, after a natural disaster for example, Employment New Zealand says you cannot be made to take annual holidays on less than 14 days' notice if you are willing and able to work.

Public holidays are not annual leave. If one falls during your leave on a day you would otherwise have worked, it is treated as a public holiday, not a day off your balance (s 40).

Closedowns: notice and how they work

A closedown is a period when your employer customarily closes, or stops the work of some staff, and requires people to take annual holidays (s 29). Christmas and New Year is the usual one, but some industries close at the end of a season. The rules:

• Once a year. Your employer can have only one closedown in any 12-month period (s 30), though different parts of a business can close at different times (s 31).
• 14 days' notice. You must be told at least 14 days before it starts (s 32).
• Your entitlement first. If you are entitled to annual holidays, the closedown is taken as annual holidays, as far as your entitlement covers it, and paid in the usual way (s 33).
• Other closures need agreement. A second shutdown in the same 12 months, or any closure outside the closedown rules, needs your agreement, including on how it is paid (s 30).

Public holidays inside a closedown are paid as public holidays, separately from your annual leave, if they would otherwise have been working days for you. The Act says that is decided as if the closedown were not happening (s 12(3A)), and the same goes for a day you are sick. Take a closedown from Thursday 24 December 2026 to Friday 8 January 2027. It covers 12 weekdays, and for someone who works Monday to Friday, four of them are public holidays: 25 and 28 December, and 1 and 4 January. So it should use 8 days of annual leave, not 12.

If you do not have enough leave yet

There are two situations, and the Act treats them differently.

Some leave, but not enough to cover it

If you are entitled to annual holidays but your entitlement does not cover the whole closedown, you and your employer may agree that you take the rest in advance (s 33). Employment New Zealand adds other options you can agree: alternative holidays you are owed, leave without pay, or other leave your employer offers. Your employer does not have to agree to leave in advance. In Employment New Zealand's example, someone with two weeks left before a four-week closedown is allowed one week in advance and takes the last week unpaid.

Not yet entitled to annual holidays

If you have not yet worked 12 months, your employer can require you to stop work for the closedown (s 32). It must then pay you 8% of your gross earnings since you started, or since you last became entitled, less anything already paid for leave in advance or as pay-as-you-go holiday pay (s 34). After that, you are not entitled to annual holidays for the time before the closedown, or to pay for the closedown itself.

Your anniversary date also moves. Your next 12 months are treated as starting on the day the closedown began, or a nearby date your employer nominates, so every year lines up with the closedown (s 35). In Employment New Zealand's example, someone who started on 15 September is paid 8% of their earnings to 23 December, which it says is similar to one week's pay, for a closedown from 24 December to 5 January.

That can leave a gap in your budget. Employment New Zealand says you and your employer can agree that you take some leave in advance on top of the 8%, which means less leave next year. If you agree to leave in advance, Employment New Zealand says your employer should get your written agreement that it can recover the overpayment from your final pay if you leave before becoming entitled.

Being told to use up a large balance

Annual holidays do not expire. Your entitlement stays until you take it, cash some of it up, or are paid out when you leave (s 16). There is no rule that a balance has to be used by a certain date, or that a large one is a problem for you.

Your employer can still ask you to take some. If you cannot agree when you will take it, section 19 lets your employer require you to take leave you are entitled to, with at least 14 days' notice. Before it gets there, talk it through and offer dates that suit you, perhaps a long break around the public holidays, rather than waiting to be told.

Cashing up is your choice, not your employer's. You can ask in writing to be paid out up to one week a year, your employer can say no without a reason, and it cannot make a request to cash up a condition of your job (ss 28A and 28C).

What changes in 2028

The Employment Leave Act 2026 replaces the Holidays Act on 6 August 2028, and until then your employer must follow the Holidays Act. Leave will be counted in hours, building up from your first day (s 24). You and your employer must make all reasonable efforts to agree when you take leave (s 26). If you cannot agree, section 28 lets your employer require it, with no less than 14 days' notice in writing, but only up to the balance you held at your most recent start date anniversary, and never on a day you would not otherwise have worked (s 27).

Closedowns change too. Your employer can have no more than one annual closedown starting in each calendar year for you (s 47), and must give at least 21 days' written notice, saying when it starts and ends, any requirement to take annual or unpaid leave, whether leave in advance is available, and any other leave you can use (s 48). It can require you to take leave you have accrued, and unpaid leave only where your accrued leave, agreed advance leave and those other arrangements are not enough (s 49). The new closedown sections have no 8% payment and no moving anniversary date. Our article on the Employment Leave Act 2026 covers the rest of the change.

Checking a closedown notice against your own record

When the notice arrives, check five things:

1. It reached you at least 14 days before the closedown starts.
2. It is the only closedown in the last 12 months.
3. The number of working days in it, less the public holidays that fall on days you would normally work.
4. Your balance on your latest payslip, less any leave you have already booked, covers those days. If not, ask in writing about leave in advance or alternative holidays you are owed.
5. If you have been there less than 12 months, the notice should mention the 8% payment and your new anniversary date.

Our guide to leave in New Zealand sets out every annual holiday rule that applies until 2028. If something does not add up, raise it with your employer first. Employment New Zealand on 0800 20 90 20, your union or a lawyer can help if that does not settle it.

Step four is easier with your own numbers. The Leave section of Your Career keeps the annual and sick leave balances you type in from a payslip, with its date, counts forward from there, and records each day of leave you take or book, so it shows what is left once the closedown is booked. It works in days under the Holidays Act, does not know public holiday dates and does not plan leave for you; it is a cross-check on your payslip, never a replacement.

Check the notice against your own numbers