Close up the holes in your holiday pay!

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The Holidays Act 2003 is a tricky beast at the best of times.

Over the Christmas break, there are 4 public holidays in less than 2 weeks, plus the mad Christmas rush of trying to finish things off before the end of the year.  Some companies have the end of their financial year too.  With all this rush, it’s easy to get confused about Holidays Act requirements.

We thought we’d share a few tips, so you don’t get caught out by the Holidays Act over this time.

  1. If you have employees that work on the weekend, which day is the public holiday?

Section 45 of the Holidays Act will help here.  You start with the actual day of the public holiday: Christmas Day is Friday and Boxing Day is Saturday.  Any employee that would normally work on the Friday, will take that day as a paid holiday.  Any employee who would normally work on a Saturday, will take that day as a paid holiday.  If an employee doesn’t normally work on a Saturday, then the public holiday is observed the following Monday for them and, if they would normally work on a Monday, they can take the Monday as a paid holiday.  If someone works on a Saturday and a Monday, they only get one of those days off, not both!

  1. What do you do if you want an employee to work on a public holiday?

To answer this question, start with section 47.  If you require staff to work on the public holiday, first check the employment agreement to see whether you are allowed to require them to work on a public holiday.  Then you should check if it is a day they would normally work.  If the answer to both of these questions is yes, then you can require the employee to work.

You must pay them time and a half for that day and give them another day in lieu of the public holiday.  If they would not normally work on that day or their employment agreement does not require work on a public holiday, they can choose to decline.  If they accept, you do not need to provide an alternative day on which to observe the public holiday as they would not normally work on that day anyway.

  1. If you have employees who have resigned and are finishing around Christmas time, be careful about public holidays!

When an employee terminates their employment, they must be paid out any annual leave.  Under s 40 of the Act, if a public holiday falls within the time of the employee’s annual holiday entitlement, as if it had been taken immediately after the employee’s termination date, then the employee must be paid for the public holiday as well.

Note: this applies only to accrued entitlement (which accrues on the anniversary of their employment) and not the 8% paid for any part years.  If you are unsure, feel free to contact us for clarification.  We told you the Act was a tricky one!

Hayley Coles
Hayley Coles
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