One of the most important aspects of this transition is understanding your notice period and final pay. Employment laws and your employment agreement determine how much notice you need to give, what happens if you don’t work your full notice period, and what payments you are entitled to when you leave.
In this article, we’ll guide you through notice periods and final pay, covering your employee obligations, your employer’s responsibilities, and what to expect when you leave your job.
1. Understanding Notice Periods
What is a Notice Period?
A notice period is the length of time an employee must continue working after they have given their resignation, or been given notice of termination. The notice period allows both employees and employers to transition smoothly. Employees can find new work, while employers can arrange for a replacement or handover of duties.
How Long is a Standard Notice Period?
The length of a notice period depends on:
Your employment contract: Most contracts specify a notice period of 2 to 4 weeks.
Company policy: Some businesses have longer notice requirements, especially for senior roles.
Employment type: Casual workers typically do not have a set notice period, while permanent employees do.
Legal standards: If your contract does not specify a notice period, a ‘reasonable period’ applies (usually at least 1-2 weeks).
How to Give Notice Properly
Review Your Employment Agreement: Before resigning, check your employment contract to confirm: The notice period required, any restrictions (e.g., restraint of trade), and whether you have to repay any training costs or bonuses.
Submit Your Resignation Notice: Deliver the resignation letter in person, or via email. Keep a copy of the resignation letter for your records. If your employer acknowledges your resignation, ensure you receive written confirmation of your last working day.
Can your Employer let you go during the Notice Period?
Yes, but only under certain conditions:
Serious Misconduct: If you commit serious misconduct (e.g., theft, harassment, or fraud), your employer can dismiss you immediately without notice.
Redundancy: If you are made redundant during your notice period, your employer must follow redundancy laws and provide any entitlements.
Garden Leave: Some employers may ask you not to work during your notice period, but will still pay your normal wages.
2. What to Expect in Your Final Pay
When you leave a job, your employer must pay all outstanding entitlements, including:
Final Wages: Payment for all hours worked up to your last day.
Annual Leave Pay: Any unused holiday leave must be paid out.
Public Holiday Pay: If a public holiday falls during your notice period and you would normally work that day, you must be paid for it.
Bonus/Commission Payments: If you qualify for bonuses or commissions earned before leaving, your employer must pay them.
Reimbursed Work Expenses: Any unpaid reimbursements must be settled before your departure.
How is Annual Leave Paid Out?
Unused annual leave is paid based on your average weekly earnings. If you have taken more annual leave than you have accrued, your employer may deduct the excess leave from your final pay only if your contract allows it.
When will you Receive your Final Pay?
There is no specific legal deadline, but most employers pay within the next standard payroll cycle. Some contracts specify a final pay timeframe (e.g., within 7 days of the last working day). If your final pay is delayed, request clarification from your employer. If unpaid after the next payroll date, you can file a complaint with the Employment Relations Authority (ERA).
3. Tips for a Smooth Exit
Check your employment agreement to know your rights and obligations.
Provide proper notice to maintain professionalism and avoid penalties.
Ensure your final pay includes all entitlements (wages, leave, bonuses, etc.).
Keep copies of resignation letters, emails, and final pay records.
If you are unsure about rights, seek advice an employment relations specialist.
Conclusion
Understanding your notice period and final pay entitlements ensures a smooth transition when leaving a job.
By following the correct resignation process, ensuring your employer meets their legal obligations, and knowing your rights, you can leave your job professionally while securing all the payments you are entitled to. If disputes arise, employees have the right to seek mediation or legal assistance to resolve any issues.
Unsure of your Next Steps?
Our expert team will help you understand your employment rights, and pursue resolution (including compensation) through various channels, such as: Without prejudice negotiations, mediation, the Employment Relations Authority, or Employment Court if required.
We also work on a no-win, no-fee basis – if we win your case, your employer covers the costs.
Get in touch for a free consultation! You can fill out this form – or contact us at admin@mahilaw.nz, or 0800 450 032.
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