Paying properly for public holidays this festive season

General / 25 July 2017
Paying properly for public holidays this festive season

The Christmas period can be a challenging time of year for employers trying to manage the minefield that is the Holidays Act 2003 (Act), but it pays to get it right!

Transfer of public holidays
This year, Christmas and New Year’s Day fall on a Sunday.  This means that for employees that normally have Sunday off, the public holiday will transfer to the following Tuesday.  This only occurs if the employee doesn’t normally work on the calendar date of the holiday.  If an employee normally works on the day the public holiday falls there is no transfer.  Using Christmas Day 2016 as an example, if an employee normally works Sundays then that is the public holiday.  For everyone who doesn’t work Sundays, the public holiday is Tuesday (employees can’t “double dip” and claim two public holidays if they work both the Sunday and Tuesday.)

You can agree to observe public holidays on different days if you agree in writing which public holiday is being transferred and the new date it is being transferred to, although the new date can’t be another public holiday and must be a normal working day for the employee.

Who is entitled to public holidays?
An employee is entitled to be paid for a public holiday even if they don’t work, if the day on which the public holidays falls would “otherwise be a working day”.

Not sure if your employee would have otherwise been working?  The Act lists a number of factors to consider, including what the employment agreement states, what the work patterns are, any rosters or systems in place, whether the employee works only when work is available, and the reasonable expectations of the parties.

Working public holidays
If your employee works on a public holiday they are entitled to be paid their normal pay (relevant or average daily pay), plus half that amount again for hours actually worked.  If the public holiday falls on a day the employee would otherwise have worked, they will also be entitled to an alternative holiday.

In summary, alternative holidays can either be used, by agreement or at the employer’s direction, or may be cashed out if agreed with the employee on their request after 12 months have passed since accrual.

It pays to ensure you know when and what your employees are entitled to this festive season.  If you get things wrong, you could be liable to a penalty, and backpay for the entitlement owing.

If you would like advice regarding public holidays, please contact our team.

Disclaimer:  We remind you that while this article provides commentary on employment law, it should not be used as a substitute for legal or professional advice for specific situations.  Please seek legal advice from your lawyer for any questions specfic to your workplace.

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