TempusSummer hiring decisions get made in a hurry, in a busy month, by people who need someone starting on Monday. The paperwork is the part that gets skipped, and it is the part that turns up again two years later.
Most summer hiring in New Zealand happens under time pressure. Someone resigns in late November, the Christmas rush is already visible, and a person who can start this week is worth more than a person who is perfect. So the agreement gets copied from the last one, a box gets ticked that says casual, and everyone gets on with the actual work.
That is understandable, and it is where a lot of February payroll corrections begin. The decisions that matter were made in about four minutes in November, and nobody has looked at them since.
One thing before we start. We run payroll. We are not an employment law firm, and we do not advise on whether a particular person is or is not a casual employee. That question belongs with Employment New Zealand's guidance or your own employment adviser. What we can tell you is what each answer does to your pay run, because that is the part that tends to surface late and cost money.
The Holidays Act Does Not Have a Casual Category
Start here, because it explains most of what follows.
Casual employment is not defined anywhere in New Zealand legislation. Employment New Zealand puts it plainly: "Casual employees and casual employment are not defined in the law." It describes how an arrangement works in practice. It is not a status you can assign to somebody.
More to the point for payroll, the Holidays Act 2003 does not use the category at all. It has no casual employee, no permanent employee and certainly no seasonal employee. It asks an entirely different set of questions. Has there been twelve months of continuous employment. How many hours has this person actually worked over the past six months. Is this a day they would otherwise have worked.
Every one of those is answered by what happened, not by what the agreement is called.
So the box ticked in November does not decide what you owe. The pattern of work does, and it does so whether or not anyone is watching.
Casual, Fixed-Term and Seasonal Are Not Three Words for the Same Thing
- Fixed-term is the one with a statutory definition. Section 66 of the Employment Relations Act 2000 governs it, and it means ordinary employment, with ordinary obligations, that has a defined end. A fixed-term employee is not a lesser kind of permanent employee. They are a permanent employee with a finish line, and nearly everything that applies to your permanent staff applies to them.
- Casual has no statutory definition, as above. Employment New Zealand describes it as a situation where the person works when it suits them and their employer, can turn down work, has no regular pattern of work, and does not expect ongoing employment.
- Seasonal is not a category in either sense. It describes your business, not the employment relationship. A seasonal worker is a fixed-term or casual worker who happens to be hired in summer. The one place the word carries statutory weight is immigration, in the Recognised Seasonal Employer scheme, and that is a visa category rather than an employment status.
So "we take on seasonal staff" does not answer the question of what you are hiring. You still land in one of the first two, and they behave very differently in a pay run.
Fixed-Term: Section 66 Asks for More Than People Expect
Section 66 requires genuine reasons based on reasonable grounds for the employment ending at a set date, event or project, and it requires you to tell the employee, in writing in the agreement, when or how the employment will end and why.
Two reasons are expressly excluded by the section. A fixed term cannot be used to exclude or limit an employee's rights under the Act, and it cannot be used to establish whether somebody is suitable for permanent employment. Employment New Zealand's guidance adds that the reason has to relate to the work rather than to the employee's personal situation.
Where those requirements are not met, the agreement is not void. What section 66 provides is that the employer may not rely on the end-date term if the employee elects to treat it as ineffective. The practical effect on your payroll is that the employment carries on when you had budgeted for it to stop, and the leave balance carries on with it.
If a fixed term is doing real work in your business, it is worth having the wording checked by someone who does employment law. It is a short job in November.
Casual: The Label Does Not Decide It, the Pattern Does
This is the one that quietly costs money.
"Casual" at the top of an employment agreement carries no weight if the actual working pattern says something else. Employment New Zealand's guidance on casual employment works through two examples that make the point better than we could, including one where an agreement says casual and the person turns out, on the facts, to be permanent part-time. It is worth five minutes:
Casual employment — Employment New Zealand
The same guidance lists what the Employment Relations Authority and the Employment Court look at: whether a regular pattern can be established, whether work is allocated in advance on a roster, whether the person has to seek agreement to be unavailable, whether start and finish times are consistent, and whether the business relies on them to get the work done.
For payroll purposes the consequence is simple enough. If the arrangement changes, what you owe changes, and it changes from when the pattern changed rather than from the day somebody notices.
Employment New Zealand's own advice to employers is to check the work situation regularly, give a new agreement where it no longer matches reality, review holiday and leave entitlements, and stop any pay-as-you-go payments. That is a calendar reminder, not a project.
The 8% Question
Paying holiday pay as you go, at 8% on top of each pay, is legitimate. It is also narrower than most people think.
Section 28 of the Holidays Act 2003 allows it in two situations only:
- A genuine fixed-term agreement of less than 12 months.
- Work so intermittent or irregular that giving four weeks of annual holidays is genuinely impracticable.
And in either case, three conditions attach. The employee has to agree to it in their employment agreement. The holiday pay has to be shown as a separate, identifiable component of their pay. And it has to be at least 8% of gross earnings.
A casual label on its own does not get you through the second gate. The test is the actual work pattern, and the guidance is explicit that you should check periodically whether a regular pattern has emerged and stop the 8% payments when it has.
Then there is the trap at twelve months. If a pay-as-you-go arrangement runs past twelve months of continuous employment, the employee becomes entitled to annual holidays in the ordinary way, and the 8% you have already paid cannot be deducted or clawed back. You pay twice. Summer hires who are kept on, because they turned out to be good, are exactly the people this happens to.
What Your Summer Staff Are Actually Entitled To
Short version, and this is the position until August 2028:
- A written employment agreement, before they start work. Not a verbal understanding and not a text message. You must also keep a signed copy, or your current draft, and give them a copy if they ask.
- At least the minimum wage. From 1 April 2026 the adult rate is $23.95 an hour. The starting-out and training rate is $19.16, which is 80% of the adult rate, and it only applies in defined circumstances, mostly to some 16 and 17 year olds in their first six months with you and to some trainees. It is not a general discount for young staff, and applying it by default to anybody under twenty is a common and expensive mistake.
- Public holidays, on the usual terms. If the day is one they would otherwise have worked, they get a paid day off, or time and a half plus an alternative holiday if they work it. If it is not an otherwise working day and they work it, they get time and a half and no alternative holiday. Our Christmas payroll post covers the mechanics and the four public holidays over the break.
- Sick leave, sooner than you may assume. Ten days become available after six months of continuous employment, or after six months in which they have worked an average of at least ten hours a week, with at least one hour in every week or forty hours in every month. A summer casual who keeps picking up regular shifts can qualify around April, and the entitlement is ten days whether they work five days a week or two.
- Accurate wage, time, holiday and leave records. These are the thing that makes any later question answerable. They are also the thing nobody keeps properly for short-term staff.
Three Things That Go Wrong Every January
None of these are complicated. All three are easier to fix in November than to unwind in autumn.
Now Look Two Summers Ahead
This is the part worth reading twice, because the summer after next is the one that changes.
The Employment Leave Act 2026 replaces the Holidays Act on 6 August 2028, and as we understand it, applies from each employee's first pay period beginning on or after that date. Everything above remains correct until then. Nothing in this section needs action in November 2026.
But summer hiring is precisely where the new Act lands hardest, for one reason: it draws firm lines between standard hours, additional hours and casual hours, and those three buckets are treated very differently.
A few questions that will be worth answering well before then, rather than in the week it lands:
- Do our employment agreements describe hours clearly enough? Worth doing regardless of the new law, and it is the input every payroll system will depend on from 2028.
- Which of our seasonal people are genuinely casual, and which have drifted? The answer changes what they are paid under the new framework, not just how their leave is recorded.
- What happens to balances at the changeover? For staff who are mid-engagement across the boundary, the conversion is the thing to understand in advance.
- What about people on several different rates? The new Act uses a single leave pay rate, and our understanding is that it is based on the lowest hourly rate applying to the employee for the day the leave is taken. Seasonal staff frequently work across more than one rate, so this behaves differently from the current comparison method.
Our honest position: none of this is urgent in November 2026. There is no early adoption to weigh up and no action required this summer. What is worth doing is making sure the agreements you write for this season describe hours properly, because the agreements you write now are the ones that will still be in the drawer when the Act changes.
What to Do This Week
Four things, and none of them take long.
- Decide, for each summer role, whether it is genuinely casual or genuinely fixed-term. If it is fixed-term, write the actual reason into the agreement. Employment New Zealand's Employment Agreement Builder is free and covers the mandatory clauses.
- Get the agreement signed before the first shift. Not after the first week.
- Look at anybody on 8% who has been with you a while. Check whether their pattern is still irregular. If it has settled, change it now rather than at twelve months.
- Diarise a check in March. Who is still here, what pattern have they settled into, and does their agreement still describe the job they are actually doing?
That last one is the single highest-value habit in this whole post, and almost nobody does it. Summer hiring problems are rarely caused by the hire. They are caused by nobody revisiting it once the season ended.
If you are not sure which category somebody falls into, that is a reasonable thing not to be sure about, and Employment New Zealand's guidance is the right place to start.
Once it is settled, making sure the pay run reflects it is our job rather than yours.