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Managing leave and payroll entitlements over public holidays can be tricky. As a business owner, it’s important for both regulatory requirements and staff morale to get this right.
In simple terms, all employees are entitled to a paid day off work on a public holiday.
In New Zealand, public holidays include:
Many public holidays in New Zealand have fluctuating dates. For example, Easter and Matariki holidays aren’t on fixed days - they change each year and are always on a set Monday or Friday.
However, holidays such as Waitangi Day and Christmas Day fall on the same date every year. In these instances, if the date falls on the weekend, the holiday is transferred to the next working day. Most often this is a Monday - hence the term “Mondayisation’ - but it may be a Tuesday.
This only happens for employees who would not usually work the day of the actual holiday; for example, most office workers that don’t work weekends. If a staff member usually works weekends, they can’t take the day of the holiday off as well as the following Monday.
Fortunately, online payroll software like Smartly, takes care of leave management, calculates leave entitlements, and manages payroll implications automatically around public holidays.
An employee is entitled to be paid for a public holiday if the public holiday falls on a day that would otherwise be a working day for the employee. An ‘otherwise working day’ is a day that an employee would normally have worked, but for the public holiday or leave taken for another reason such as sick or bereavement leave days, and the day being taken as alternative holidays.
It’s important to identify otherwise working days for payroll purposes so you know how to pay holiday pay and how much to pay both working and non-working staff on those days.
Figuring out if a day is an otherwise working day is usually fairly obvious. If the person isn’t at work and they would usually expect to be, then it’s an otherwise working day. However, it can be more complicated if the employee only works when work is available, or if their schedules are variable.
If you need to, you can identify an otherwise working day in one of two ways:
For people with set work hours week to week, whether full time or part time, an otherwise working day is one they would normally be at work. For example, a full time staff member would usually be at work on ANZAC Day if it falls on a Tuesday.
However, a part time staff member that only works Wednesday to Saturday would not qualify for an otherwise working day in this instance.
For people that work variable shifts, an otherwise working day is based on the usual shift rotation. If the shift pattern would have the individual working on a public holiday, they’re entitled to the day off work.
However, if the individual is rostered off work on a day that’s a public holiday, they don’t have any additional entitlements.
People are entitled to transfer a public holiday to another day as an alternative holiday also known as day in lieu. This means the public holiday will be observed on another day, and they will work the public holiday.
Requests to transfer a public holiday must be considered in good faith by the employer, and any decision must meet the following criteria:
When transferring a public holiday, the staff member is granted the same entitlements they would get, just on a new date. An employee is not entitled to an alternative holiday if the employee only works on public holidays.
Entitlements for people who work public holidays depends on their situation.
Fortunately, online payroll software can recognise public holidays and employees’ work patterns to ensure people are paid correctly. If your payroll is done manually, it’s important to consider specific details such as:
If the day is an otherwise working day for the staff member, they’re paid for the day off. If the day is not an otherwise working day, the staff member has the day off work, but they’re not paid for it.
If the day is an otherwise working day, the person is paid time and a half at their usual rate. They’re also entitled to a day in lieu, or alternative holiday.
If the holiday is not an otherwise working day, the person is still paid time and a half, but they don’t get the additional day in lieu.
Casual employment on public holidays can be tricky, as there is a range of circumstances you may need to consider.
If casual employees work a public holiday, they’re entitled to be paid time and a half. Generally speaking, they don’t also get a day in lieu, unless the day is an otherwise working day. The reason most casual workers don’t fall into the day in lieu category is that they don't usually have regular scheduled shifts.
You can’t force people to work public holidays if they don’t want to. If they’re going to be working public holidays, there are rules.
First, the employee agreement needs to state that they may be required to work public holidays. It should also outline their entitlements when they do - i.e. what they’ll be paid and if they’ll get a day in lieu.
If it’s not outlined in the work contract, you can still ask employees to work a public holiday. It should be a reasonable request, and employees are entitled to refuse.
When assessing whether a request or refusal is reasonable or not, there are a few factors that are considered:
Read more: The parental leave management guide for employers
Simply wanting people to work in order to justify paying employees on public holidays is not a good enough reason.
With so many variables involved in people working public holidays, ensuring employees are paid correctly can take considerable work.
However, one of the great benefits of online payroll software with employee leave management is that it syncs payroll processes to the appropriate action based on individual circumstances. By automating public holiday payments, businesses save time, reduce the likelihood of errors and ensure compliance.
Smartly makes payroll simple, particularly in these instances where it can be a real headache. Find out more about how Smartly helps to pay your people accurately and easily, despite the curve balls that public holidays can be.
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If you want to learn more about how your day-to-day tasks can be made simpler, you can chat to us to get some insight on how payroll software could benefit your business. Smartly can make the complex tasks seem simple including payroll, timesheets, leave and more! Smartly takes care of most of the faffing, so you can focus on the important stuff.
