Public holidays closing time

4 Types of Payments for Public Holidays

Working out what to pay staff on a public holiday can send you into a tailspin.

Do I pay them or not?

And if I pay them, how much?

Actually, working this out is simple. You just have to answer a couple of questions about each employee.

2 QUESTIONS AND 4 CATEGORIES

Two factors determine what pay staff receive for a public holiday:

  • whether they worked on the public holiday; and
  • whether the public holiday would have been a working day for them if it was not a public holiday.

Answering those two points is all you need to do.

Because if you do that, you’ll find there are only four categories of employees:

  • Category A: Employees not required to work on a public holiday and who would not have otherwise worked that day. These employees will not receive any pay for that public holiday;
  • Category B: Employees not required to work on a public holiday and who would otherwise have worked that day. These employees must get their relevant daily pay for that day;
  • Category C: Employees required to work on a public holiday and who would not have otherwise have worked that day. These employees must get at least time and a half for the hours actually worked on the day; and
  • Category D: Employees required to work on a public holiday and who would otherwise have worked that day. These employees must get at least time and a half for the hours actually worked. They also must get an alternative holiday on pay.

You can set it out in a table like this:

Working dayNot working day
Required to workTime and a half for the hours actually worked on the day and alternative holidayTime and a half for the hours actually worked on the day
Not required to workRelevant daily payNo pay

WHAT IS A WORKING DAY?

This is the crucial question in most cases. For some staff this can be tricky to work out.

Let’s say you have a variable roster, that changes from week to week. You may have an employee who works Mondays sometimes. If a public holiday falls on a Monday, is that a day they would have worked?

The Holidays Act says that you have to look at a range of factors to decide the matter for that employee:

  • What does their employment agreement say?
  • What are their work patterns?
  • Does the employee only work when work is available?
  • What do the rosters suggest?
  • Would you or the employee reasonably expect that they work that day?

These factors apply a kind of commonsense test of fairness. In most cases, reflecting on these factors will produce the right result.

WHEN YOU CAN’T WORK IT OUT

Sometimes after taking the above factors into account, the answer may still not be clear.

What do you do then?

In that case the Holidays Act says that if its too hard to work out, you can ask a Labour Inspector to determine the matter.

Labour Inspectors are employees of the Ministry of Business, Innovation and Employment. They are like the police force of workplace relations.

You can ask for Labour Inspectors to help through the Ministry’s website.

WHAT ABOUT ALTERNATIVE HOLIDAYS?

The only staff who get alternative holidays are those in Category D above.

They are those who work on public holidays that are days they would have otherwise worked anyway.

You have to give those staff a chance to have a break from work on another day. Its an alternative holiday, because it substitutes for resting on the public holiday.

Like annual holidays, you don’t have to let the employee take their alternative day off when they like. You must agree to when the day gets taken.

If the holiday is not taken within 12 months, the employee can ask you to pay that day out. You don’t have to agree to that. But you may see that as a benefit, by removing a potential liability.

If the alternative day is owing when their employment ends, you must pay that day out in their final pay.

CONCLUSION

Don’t fret about what to pay your staff for public holidays. Use the four categories to work out what benefits they receive.

For each employee you need only answer two questions:

  • did they work on the public holiday?
  • would the public holiday have been a working day for them if it was not a public holiday?

When in doubt, apply the commonsense factors to work out if they would have worked on the public holiday.

Armed with this information, you can find where they sit in the table above and give them their dues.

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