The Holidays Act 2003 has been around a while now, but many kiwi employers still struggle to get holiday pay right.
Tracking, calculating, and paying holidays is an essential part of leave management and payroll.
This short blog focuses on paying public holidays. I won’t be attempting to cover every public holiday scenario, as there are many moving parts. Instead here is an overview of some questions we commonly receive.
Fixed work schedules
Firstly, public holidays are very simple for any worker with a fixed working schedule (whether part-time or full-time).
Ask yourself: is the day of the public holiday an otherwise working day? This test is easy to apply for any employee with a fixed work pattern.
For example: a regular Monday to Friday, 40 hour per-week employee will most likely receive all 11 public holidays every year. The only times they might miss-out is if they are off work on agreed unpaid leave for some reason.
Another example: if a person has a fixed part-time pattern of working every Tuesday to Thursday, they will not receive any public holiday payments for public holidays that fall on a Monday or Friday.
Having establish whether the day is an otherwise working day, you then have to look at what to pay.
When the day is an otherwise working day, employees receive payment for the day off if they don’t work, or payment of time-and-a-half, plus an alternative holiday (day in lieu) if they do work. When the day is not an otherwise working day, they receive no payment for the day off or payment of time-and-a-half but no alternative holiday if they do work.
Variable work schedules can present challenges, but most employers still operate a rostering system and this can be relied upon to determine who gets a public holiday.
Where the rostered days naturally rotate to fall on the public holiday, it is an otherwise working day so those employees get the public holiday entitlement. Where the roster naturally rotates so the public holiday is a rostered day off, the public holiday is not an otherwise working day.
You must also look at the employment agreement to ensure you are meeting any entitlements specified in there. You cannot adjust the roster or take an employee off the roster so that they miss out on the public holiday.
If you have rostered somebody to work on the public holiday and they are sick, they qualify for a paid public holiday. Here’s a great summary straight from the MBIE website:
“When an employee would have worked on a public holiday but is sick or bereaved, the day is treated as a paid unworked public holiday and: the employee would be paid their relevant daily pay or average daily pay, but would not be entitled to time and a half or an alternative holiday no sick or bereavement leave is deducted.”
Public holidays can be transferred by agreement. This year with ANZAC Day falling on a Tuesday we have had a lot of questions about this.
In this example, if you can accommodate it and an employee agrees, you can move the ANZAC public holiday to Monday, granting a long weekend. Employees receive payment for Monday off work as the transferred public holiday and Tuesday is now a normal working day, they attend work and get paid normal time, with no alternative holiday.
This must be in writing and must be agreed. If your workplace cannot accommodate this transfer you do not have to agree to an employee transfer request. Equally you cannot force a transfer if the purpose of the transfer is to reduce entitlements.
Stand-down or qualifying periods
We sometimes get asked if there is a stand-down period or qualifying period before an employee receives a public holiday entitlement and the answer is no, there is no qualifying period.
Employees are entitled to public holidays from their first day of work
For example; if a Monday – Friday worker starts with you on Monday 24th April, they will get a paid day off on Tuesday 25th for ANZAC Day. If they work, they will receive time and a half, plus an alternative holiday (day in lieu).
As always, if you are confused or have a very specific and/or unusual scenario, then consult an expert. The teams at MyHR and FlexiTime are available to help you get this right.
MyHR partnered with FlexiTime
To help you, we have partnered with one of NZ’s best small business payroll providers FlexiTime.
Their guide to public holiday payroll is well worth a read: https://www.flexitime.co.nz/blog/public-holiday-payroll.