Can Employers Refuse Sick Leave In New Zealand?

When you’re running a small business, every absence can hit hard. Rosters get thrown off, deadlines slip, and you might end up covering shifts yourself.

So it’s completely normal to wonder: can an employer refuse sick leave in New Zealand?

The practical answer is: you can only refuse to pay sick leave in limited circumstances. In most cases, if your employee is entitled to sick leave and they’ve met the notice and evidence requirements, you should record the absence as sick leave (and pay it from their sick leave balance).

Below, we’ll break down what the law expects of you, when you can ask for proof, what “refusing” sick leave really means in practice, and how to protect your business from disputes while still being fair to your team.

What Does NZ Law Say About Sick Leave?

Sick leave in New Zealand is mainly governed by the Holidays Act 2003. As an employer, your obligations also sit in the wider employment law framework (including the Employment Relations Act 2000, which requires good faith behaviour in employment relationships).

At a high level, sick leave is designed to let employees take time off when they’re:

• sick or injured; and/or
• need to care for a dependant who is sick or injured (for example, a child or spouse).

Most employees become entitled to sick leave after 6 months’ employment (meeting the relevant test), and the minimum entitlement is 10 days sick leave for each 12-month period. Any unused sick leave can generally be carried over, up to a maximum of 20 days (unless your employment agreement provides more).

If you’d like a simple refresher on entitlements and accrual, this sick leave guide is a handy reference point for business owners.

Why this matters: if an employee is entitled to sick leave and uses it properly, you generally shouldn’t treat the absence as misconduct or penalise them for taking it. Handling it incorrectly can expose your business to legal risk (including personal grievances).

Who Is Typically Entitled To Sick Leave?

Most employees (full-time and part-time) are entitled once they’ve met the relevant eligibility threshold (usually after 6 months, if they meet the Act’s work pattern test). Some casual or intermittent arrangements can be trickier, so it’s worth checking the specific working pattern and agreement.

This is one reason your Employment Contract should clearly set out key leave processes (like who to notify, when, and how evidence is handled). A well-drafted contract won’t override the Holidays Act, but it can reduce confusion and disputes.

Can An Employer Refuse Sick Leave In NZ?

Let’s tackle the main question directly: can an employer refuse sick leave?

You generally shouldn’t refuse to record and pay sick leave if:

• the employee is entitled to sick leave; and
• they are genuinely sick/injured (or caring for a dependant); and
• they have followed reasonable notice requirements; and
• they provide evidence if you’ve properly requested it.

You may be able to refuse to pay sick leave (or treat it differently) if:

• the employee is not entitled yet (for example, they haven’t met the eligibility requirements);
• they don’t have enough sick leave balance remaining (you may still agree to alternative arrangements, but you may not have to pay sick leave);
• they fail to notify you as soon as practicable (depending on your workplace policy and the circumstances);
• you’ve lawfully requested medical evidence and they don’t provide it within a reasonable timeframe; or
• there are serious credibility concerns and you handle the situation in good faith (this is where employers often get it wrong, so legal advice is wise).

Important: “refusing sick leave” is rarely just a yes/no decision. Often, what you’re really deciding is whether the absence is treated as:

• paid sick leave (if there’s an entitlement and balance);
• annual leave (only by agreement, not by force);
• unpaid leave; or
• another form of leave (for example, family violence leave or bereavement leave where relevant).

One common trap for employers is trying to “convert” sick leave into annual leave because they’re short-staffed or the timing is inconvenient. Annual leave has its own rules, and in many cases you can’t simply force it on an employee. If you’re unsure where the line is, it’s worth reading up on annual leave direction rules so your business doesn’t accidentally create a compliance issue.

When Can You Ask For A Medical Certificate (And Who Pays)?

Most disputes about sick leave don’t start because the employee took time off. They start because the employer asks for proof (or refuses sick leave pay) in a way that feels unfair or inconsistent.

Under the Holidays Act, you can generally request evidence of sickness or injury in these common situations:

• After 3 consecutive calendar days of being sick (note: these are calendar days, not just rostered work days).
• Before 3 days, if you tell the employee as early as possible that you require proof and you pay the reasonable costs of getting that proof.

Practical example: An employee calls in sick for a Friday shift. If you suspect a pattern and want a medical certificate for that single day, you may be able to request it-but you’ll typically need to cover the reasonable cost, and you need to make the request promptly (not days later).

Tip for small businesses: keep your approach consistent across the team. If you only demand certificates from one person (or one role), it can quickly become a trust issue and, in the worst case, look like discrimination or retaliation.

What Counts As “Evidence”?

In many workplaces, “evidence” is a medical certificate. But evidence can sometimes include other reasonable proof, depending on context and what you request.

That said, because health information is sensitive, you should be careful about what you collect and how you store it. Your employee is usually not required to disclose detailed diagnoses. You generally only need enough information to confirm they were unfit for work (or needed to care for a dependant) for the relevant period.

This is where a clear privacy approach matters. Many businesses use an internal privacy framework (especially if you hold medical certificates, return-to-work notes, or incident records). If you’re tightening up your HR systems, an Employee Privacy Handbook can help set expectations and reduce risk around handling sensitive information.

Common Scenarios Where Employers Get Sick Leave Wrong

Even employers with the best intentions can slip up with sick leave-usually because the business is under pressure and a decision is made quickly.

Here are some common “danger zones” where we see small businesses run into issues.

1. Refusing Sick Leave Because It’s “Inconvenient”

If an employee is genuinely sick and entitled, you generally can’t decline to treat the absence as sick leave just because:

• it’s a busy period;
• you’re short staffed;
• they’re supposed to open/close;
• you think they “should have planned better”.

It’s frustrating, but that’s part of running a business with staff. The better approach is to plan operational contingencies (on-call lists, cross-training, casual back-up) rather than trying to deny leave.

2. Treating Mental Health Days As “Not Real Sick Leave”

In New Zealand, mental health can be a legitimate basis for sick leave. If an employee is unfit for work due to stress, anxiety, burnout, or another mental health condition, that may qualify the same way a physical illness would.

From a business perspective, it’s often better to treat these issues early and sensitively rather than pushing someone to work until it escalates into long-term absence or performance issues.

If this is coming up in your workplace, this guide on mental health leave requests explains how to approach it in a way that’s compliant and practical.

3. “No Proof, No Pay” Without Following The Rules

You can’t automatically refuse sick leave pay just because you feel unsure. If you want evidence, you need to request it in a way that aligns with the Holidays Act (including who pays and when the request is made).

If you do request evidence properly and the employee doesn’t provide it, you may have a stronger basis to treat the absence differently-but you should still respond in good faith and document your steps.

4. Turning A Sick Leave Issue Into A Disciplinary Issue Too Fast

Sometimes an employer suspects an employee is taking sick leave dishonestly. That can happen (for example, if an employee is seen working elsewhere while “sick”).

But acting on suspicion without process is risky. Jumping straight to threats, stand-downs, or termination can create a personal grievance exposure even if your suspicion later turns out to be correct.

A safer approach is usually:

• request medical evidence (where lawful);
• ask questions neutrally and in good faith;
• investigate if needed (fairly, with an open mind);
• get legal advice before escalating to formal steps.

What Should You Do Instead Of Refusing Sick Leave?

In many cases, the smarter move is not “refusing” sick leave, but choosing a compliant alternative that keeps the business running and reduces legal risk.

Option 1: Treat It As Unpaid Leave If There’s No Entitlement Left

If an employee has no sick leave balance remaining (and no alternative paid entitlement applies), you can discuss unpaid leave for that absence.

Put simply: you don’t have to pay sick leave if there’s no balance available, but you should still handle the request reasonably and consistently.

Option 2: Agree To Annual Leave (Only By Agreement)

Sometimes an employee may prefer to use annual leave instead (for example, to avoid losing pay if they’re out of sick leave). You can agree to that.

The key word is agree. Avoid pressuring employees into annual leave just because you’d prefer the absence to be labelled differently.

Option 3: Consider Flexible Work Or Modified Duties (Where Appropriate)

Not every illness requires full absence. Sometimes an employee can work from home, do admin tasks instead of physical duties, or do a shorter shift.

This isn’t always possible (and you should never pressure someone to work if they’re unfit), but it can be a practical option if the employee suggests it and it’s safe.

Remember, you still have duties under the Health and Safety at Work Act 2015 to provide a safe work environment. Letting someone work when they’re not fit (for example, operating machinery while unwell) can create real safety risk.

Option 4: Update Your Policies So Everyone Knows The Process

A lot of sick leave conflict comes down to uncertainty: who to call, when to call, what to provide, and what happens if a pattern emerges.

Consider documenting a clear sick leave process in your employment documentation and policies, including:

• who the employee must notify (manager/owner/shift supervisor);
• how they must notify (call/text/email);
• when they must notify (for example, before shift start where possible);
• when medical evidence may be requested;
• how your business handles repeated short absences; and
• how you manage privacy and storage of certificates.

This is also a good time to review whether your Workplace Policy suite is fit for purpose, especially if you’ve grown quickly or you’re hiring for the first time.

How To Protect Your Business When You Suspect Sick Leave Misuse

Sometimes the issue isn’t sick leave itself-it’s a pattern that doesn’t add up. For example:

• frequent Monday/Friday absences;
• sick leave immediately before or after annual leave;
• repeated sick leave on major event days;
• conflicting social media posts suggesting they weren’t actually sick.

If this is happening, it’s understandable to feel frustrated. But the safest response is structured and well-documented.

A Step-By-Step Approach For Employers

1. Check the basics first: confirm the employee’s sick leave balance, eligibility, and whether they followed notice requirements.
2. Be consistent: treat similar situations similarly across the business (this reduces risk of “unfairness” arguments).
3. Request evidence lawfully: especially if the absence is 3+ consecutive calendar days, or earlier if you pay reasonable costs and request promptly.
4. Document everything: note the absence, your request, what was provided, and what you decided.
5. Address patterns carefully: if there’s an ongoing issue, consider a meeting focused on attendance expectations rather than accusations.
6. Get advice before disciplinary action: if you think it’s serious misconduct (dishonesty) or a medical incapacity issue, get tailored guidance.

Also keep in mind that what looks like “misuse” may be a genuine health issue, disability, caring responsibility, or something else protected. Going in too hard too early can create legal exposure, even where the business concern is legitimate.

Key Takeaways

• In most situations, if the employee is entitled, genuinely unwell (or caring for a dependant), and meets notice/evidence requirements, you should generally treat the absence as sick leave and pay it from their sick leave balance.
• You may be able to refuse to pay sick leave if the employee isn’t entitled yet, has no balance left, hasn’t followed required processes, or doesn’t provide evidence after a lawful request.
• You can usually request a medical certificate after 3 consecutive calendar days, or earlier if you request it promptly and pay the reasonable cost.
• Mental health can be a valid reason for sick leave, and it’s generally safest to treat it seriously and consistently.
• Instead of “refusing” sick leave, consider compliant options like unpaid leave (if no balance), annual leave by agreement, or safe flexible work arrangements.
• Clear contracts and policies help you stay compliant and reduce disputes-especially around notice, evidence, and privacy.

If you’d like help reviewing your sick leave processes, updating your Employment Contract, or putting workplace policies in place that protect your business from day one, reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.