UPDATED 4.36PM Trade Unions want a group involving businesses and the Government to be set up urgently, to look into problems with holiday pay.

Tens of thousands of workers may have been incorrectly paid for public holidays, due to misapplication of the Holidays Act - with some payroll companies saying hundreds of thousands of workers could be affected.

CTU President Richard Wagstaff said business, the unions and Government agencies need answers to several questions.

He said they need to look into how "big the problem is" and "what the possible solutions are".  

"We don't think the Labour Inspector, with its current resourcing, can possibly get around the New Zealand workforce in anywhere near enough time."  

He said that's concerning because this is "money that's being owed to working people".  

"It may not be much to some, but it may be quite a lot to others and we need to address it quickly."

Business New Zealand said it's willing to sit down with the unions to sort out the problems.

CEO Kirk Hope said there's a willingness to talk with the unions about ways to improve the law.

He said there's no consistent definition of a work week or work day, and the Government should change the unit of calculation to base it on hours worked.

Mr Hope said the law needs to be simplified so it can easily be applied to people on different types of contracts.

He said he "would welcome the opportunity to talk along with the unions to the Government about clarifying that."