Doing the Right Thing Isn’t Easy but It Matters

When it comes to payroll, accuracy isn’t a luxury. It is a legal and ethical necessity. For organisations managing thousands of employees under complex legislation, ensuring every payment is right, every time, can be a monumental challenge. Over the past few years, AMS has been privileged to work alongside Health New Zealand districts on one of the most ambitious projects in New Zealand: the Holidays Act Remediation and Rectification (R&R) programme. The journey wasn’t just about fixing past errors. It was about designing a better, more compliant future and doing right by the people who keep our health system running.

The Challenge: Unpacking Payroll Complexity in Aotearoa

• The New Zealand Holidays Act is notoriously difficult to interpret and even harder to systematise. Its requirement to calculate leave based on both Relevant Daily Pay (RDP) and Average Daily Pay (ADP) introduces complexity that traditional payroll systems and even many modern ones aren’t equipped to manage. In practice, this meant:

• Annual Leave was often managed in hours instead of weeks.
• Sick and alternative days weren’t always treated correctly.
• Sick and Alternative leave were often managed in hours instead of days.
• Relevant Daily Pay was not always validated or correct'.
• Leave without pay (LWOP) sometimes skewed earnings calculations.
• Gross earnings were inconsistently defined.
• Casual and termination payment rules were not uniformly applied.

These weren’t isolated issues. They were embedded in legacy practices and arose from legislative ambiguity rather than “system limitations.” The Act itself contains grey areas — for example, requiring leave to be measured in weeks without defining what a week is for different employees.

New Zealand’s payroll environment is unlike most. Multiple employment instruments, variable hours, union agreements, and regulatory precision requirements all combine to create significant calculation complexity.

At the heart of this is the Holidays Act 2003. Well-intended but technically demanding, the Act requires organisations to navigate:

• Dual-method calculations (Ordinary Weekly Pay vs Average Weekly Earnings).
• Managing and paying leave in weeks with no definition of what a week is for variable workers.
• Inclusion of variable earnings with no definition of what constitutes regular.

This complexity isn’t hypothetical. Many well-resourced organisations, both public and private, have invested millions remediating leave and pay calculations over periods spanning 10 years or more. The issue wasn’t caused intentionally, it was and the sheer intricacy of getting it right. 

Two Halves of the Fix: Remediation vs. Rectification

The R&R programme was divided into two parallel and deeply interwoven workstreams.

Remediation: The Lookback

This involved a retrospective audit of every employee’s time and pay data, dating as far back as May 2009. The objective was to identify any underpayments or overpayments and recalculate what employees were truly owed based on correct interpretations of the Holidays Act.

Key steps included:

• Cleansing, converting, and aligning historical data
• Running complex entitlement and payment calculation
• Reimporting corrected data into live payroll systems

Rectification: The Path Forward

• AMS introduced functionality for Average Daily Pay (ADP) top-up, which allows employers to pay Relevant Daily Pay (RDP) where possible, but automatically top up to ADP if it is higher. This protects employees and gives employers a clear path where legislation is ambiguous.
• We also delivered Length-of-Week methodologies for Health NZ, ensuring leave could be managed in weeks without requiring every individual employee’s “week” to be manually defined and monitored. This reduced administrative overhead while restoring compliance. 

The Human Engine: Teams, Trust and Tenacity

Behind the spreadsheets, code, and configuration work was a powerful network of experts across many parties. Partnership with Health New Zealand contributed in several key areas:

• Product enhancements to AMS LEADER
• Implementation planning and testing
• Data cleansing, ETL (Extract Transform Load) scripting, and imports
• Shared frameworks and knowledge to ensure alignment across districts
• Change support for teams adjusting to new processes

The scale of effort was enormous. In 2022, AMS delivered 159 development items related to R&R, participated in hundreds of project meetings, and dedicated specialist capacity for design and go-live support.

What Made This Work

• Shared Commitment to Getting It Right Every stakeholder remained focused on a common goal: ensuring people were paid correctly and transparently.
• Leadership at Every Level AMS helped guide interpretation, define compliant configurations, and transfer knowledge.
• Built-for-NZ Technology AMS LEADER was built specifically for New Zealand’s environment, enabling automation and adaptability.
• Local Relationships and Trust AMS worked closely with district teams, building trust and ensuring successful delivery.

Outcomes and Reflections

By the end of 2023, multiple districts had successfully gone live with rectified systems. Remediation calculations were complete or underway. Employees had updated balances, and payroll accuracy was restored.

This programme demonstrated that with collaboration, commitment, and the right technology, even the most complex legislative challenges can be met.

The Road Ahead: More Than a Project

AMS is using the lessons from R&R to continue improving. We are investing in:

• Evergreen payroll functionality
• AI and automation
• Enhanced configurability and analytics

Our mission remains clear: to build clarity where legislation is grey, and to give organisations confidence that they are doing right by their workforce.

Final Word

To the health workers affected, the district teams, assurance partners, and every AMS team member who contributed, thank you. This wasn’t just a programme. It was a promise kept.