More than 100,000 health workers are owed about half a billion dollars for payroll breaches, but they may have to wait up to two years to get paid.
District Health Boards have revealed they owe $550-650 million to cover mistakes made since 2010 in leave and shift allowance pay under the Holidays Act.
The bill dwarfs the Holidays Act payouts already made or being made by police, Corrections, the Ministry of Business, Innovation and Employment, and other public and private sector employers.
Arrears have cost police more than $45m since late 2015, and Corrections $16m.
Health Minister David Clark said it would take up to two years for people to get paid.
He said staff had been "short-changed over many years. But this Government is putting things right".
"Many organisations have been dealing with the issue of how to identify and rectify Holidays Act non-compliance, but in health the National government did nothing."
The Holidays Act has been criticised for being unwieldy and is being overhauled.
The DHB also face having to overhaul their payroll systems, to comply with whatever legislative changes are made.
The boards' payroll arrears make up more than half of the overall public health sector deficit of $1.081 billion.
