Economic Development Minister Steven Joyce says thousands of teachers may be out of pocket due to a holiday pay botch-up.

Tens of thousands of Kiwis have been shortchanged by upto $1800 on their holiday pay and the number looks set to grow.

The Ministry of Business, Innovation and Employment (MBIE) Labour Inspectorate has confirmed 42 employers have been investigated for payroll-related breaches of the Holiday's Act since 2012.

So far 24,000 workers have been left out of pocket in eight of the 20 investigations that have been completed.

Those payment breaches average from $70 to $1800 per worker.

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"Where problems with payroll exist, the Labour Inspectorate has a clear expectation that employers will rectify the issues to ensure future compliance. They must also take appropriate steps to remediate employees for past breaches," Inspectorate general manager George Mason said

Thousands of teachers could see the number of affected workers grow amid concerns they've again been hit by a pay botch-up.

They were stung in 2012 after Talent2, the company that set up the new Novopay system, was beset by problems that left teachers overpaid, underpaid or not paid at all.

Education Payroll Limited, who took over from Talent2 in 2014, is currently looking into whether they have also been hit by the holiday pay calculation error.

Earlier this month the police were exposed for having to pay out more than $33 million since December to short-changed staff, after a pay bungle was discovered.

The MBIE Labour Inspectorate uncovered the breach of the Holidays Act 2003 - a miscalculation of what more than 15,000 police staff members should be paid for bereavement leave, alternative holidays, sick leave and public holidays.

MBIE has previously revealed its own internal issues with holiday pay and that problem has now broadened and both the public and private sector is at "potential risk in terms of whether holiday pay has been paid correctly," Economic Development Minister Steven Joyce said.

"EPL that runs the teacher payroll system now, the Novopay system, have said they've got concerns as to whether it's been done exactly correctly and they're looking at that at the moment."

Joyce said it would be disappointing if teachers have been affected but it's no different to any other payroll system and said it would be "unfair" to pick on EPL.

"They're worried enough to have a look at it because everyone is saying this calculation - a number of payroll companies aren't applying it correctly."

But Post-Primary Teachers' Association president Angela Roberts said it would be "nice to be told if there was an issue", rather than hear about it from Joyce via the media.

"If there's going to be a problem our members will come to us and it would be nice to have some foreshadowing."

She said the union invested a lot of resources into helping fix the Novopay fallout and if there's other potential issues a "heads-up" would be helpful.

Labour's economic development spokesman David Clark says MBIE has known about the issue for six years but have done nothing to fix it.

"Kiwis could be owed tens of thousands or millions of dollars because of the Government's failure to ensure the law is applied fairly."

"All evidence points to this being really widespread but MBIE haven't done the basic work to quantify how big the problem is," he said.

Mason said at-risk employers were those who have "employees who have fluctuations in the hours they work or receive additional pay on top of their normal wages".



"The key issue is for employers to record daily hours and extra payments made and input that into their payroll IT systems, especially where employees work fluctuating hours and or receive fluctuating pay," he said.

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