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Ho, ho, ho, ‘tis the season for Holidays Act compliance in NZ
Do you have a sound grasp of the Holidays Act and its rules around employee public holiday entitlements? With the Christmas holidays just around the corner, it’s a good time for a refresh on the legal requirements for employers.
Time to read: 5 mins
Here are some key Holidays Act reminders to ensure you remain compliant.
|
Christmas and New Year public holidays – 2023/24 |
|
Monday, 25 December |
| Tuesday, 26 December |
| Monday, 1 January |
| Tuesday, 2 January |
Public Holidays
Employees are only obliged to work on a public holiday if it is in their employment agreement and it falls on an “otherwise working day”. An otherwise working day is a day that an employee would work if they weren’t taking it as a public holiday, annual holiday, alternative holiday, sick leave or bereavement leave. If the employee works variable hours, a pragmatic approach should be taken to determine if the public holiday falls on an otherwise working day.
| Does the holiday fall on an otherwise working day for the employee? | Did the employee work? | Their entitlement |
| No | No | Nothing |
| No | Yes | Paid time and a half |
| Yes | No | Paid day off (Relevant Daily Pay or Average Daily Pay) |
| Yes | Yes | Paid time and a half and gain a one-day alternative holiday |
| Yes | Yes, but not their full normal shift | Paid time and a half for hours worked, gain a one-day alternative holiday, and the balance of the shift is paid at Relevant Daily Pay or Average Daily Pay |
Where an employee’s shift crosses over multiple days, the same logic applies. For example, if a shift starts on Christmas Day and ends on Boxing Day, the employee is paid time and a half for all hours worked and receives a one-day alternative holiday for each public holiday that was an otherwise working day.
When an employee is specifically employed only to work on public holidays, they are not entitled to an alternative holiday but must still be paid time and a half.
What about employees “on call” during public holidays?
If an employee is called out on an otherwise working day, they are paid time and a half for time worked and also gain a one-day alternative holiday. If the hours worked on the call-out are less than what the employee would usually work, the balance of hours must be paid at Relevant Daily Pay or Average Daily Pay.
If the employee is not called out, but is required to restrict their activities to the extent that they have not enjoyed a full holiday on an otherwise working day, they are entitled to a paid day off and a one-day alternative holiday.
What about leave and public holidays?
If a public holiday falls within an annual leave period, the employee gets a paid day off when the holiday is an otherwise working day. However, when a public holiday falls within a parental leave or ACC weekly compensation period, the employee does not get a paid day off, as they would not have normally worked that day.
When an employee would have worked on a public holiday but does not due to being sick, affected by family violence, or suffering a bereavement, the day is treated as a paid unworked public holiday.
Employee was going to work on the public holiday, but calls in sick
The day is treated as a public holiday taken – paid at Relevant Daily Pay (RDP) or Average Daily Pay (ADP) – and not a sick leave day.
Employee comes to work on a public holiday and then goes home sick before finishing their hours
Employee is paid time and a half for actual hours worked and receives a one-day alternative holiday. The remainder of the shift is based on a public holiday taken (paid at RDP or ADP) and not a sick leave day.
Annual closedown
Businesses can have an “annual closedown” for their whole business or part of it and it is common for this to occur over the Christmas and New Year period. They must give their employees at least 14 days' notice and when the business closes, employees are required to use their annual leave to cover it. If an employee does not have enough leave, the employer must consult with them on the most suitable approach. This may include the employee taking unpaid leave or leave in advance.
New employees who haven’t completed 12 months yet are entitled to holiday pay of 8% of their total earnings up to the closure start date, minus annual leave they’ve taken in advance, and must have their anniversary date moved to at least the start of the closedown period.
Alternative holidays
Alternative holidays are measured in days, not hours, and it does not matter how much time was worked on the public holiday, you still gain one alternative holiday. For example, if Bill and Ben both usually work Fridays, and on Good Friday, Bill works two hours and Ben works eight hours, they both get a one-day alternative holiday. This also means that an employee who works variable hours gets a full day off on whatever day they choose to take the alternative holiday on.
If you have any questions about the upcoming Christmas and New Year public holiday’s our HR / People and Culture teams are available to help.
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