{"id":2375,"date":"2020-12-24T11:40:16","date_gmt":"2020-12-24T01:40:16","guid":{"rendered":"https:\/\/nz.legalvision.com.au\/?p=2375"},"modified":"2021-02-26T18:29:54","modified_gmt":"2021-02-26T05:29:54","slug":"do-i-have-to-pay-penal-rates","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/employment\/do-i-have-to-pay-penal-rates\/","title":{"rendered":"Do I Have to Pay Penal Rates in New Zealand?"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">As an employer, you will have to pay penal rates in some circumstances. A penal rate is when you pay an employee an extra amount on top of their wage or salary for working a particular day or \u2018class\u2019 of days, most commonly <a href=\"https:\/\/legalvision.co.nz\/employment\/alternative-holidays\/\">public holidays<\/a> or weekends. However, these penal rates are generally set out in employment agreements or agreed with a union in the process of negotiating a collective agreement. For that reason, you may have some control over the level or amount of penal rates your company will have to pay. There is a lot of uncertainty around penal rates. This article will clearly explain:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">what penal rates are;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">when they apply; and<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">what happens when your business has a collective agreement in place.&nbsp;&nbsp;<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What is a Penal Rate?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">A penal rate can be any additional amount <\/span>that <span style=\"font-weight: 400\">you and an employee <\/span>agree upon, <span style=\"font-weight: 400\">regarding how much to pay the employee for working a particular day or type of days. Penal rates are not automatic<\/span> and you must outline<span style=\"font-weight: 400\"> them in employment agreements. As a general observation, New Zealand has less emphasis on penal rates compared to other countries.<\/span><\/p>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">For example, a penal rate may set out that employees get paid twice their standard wage when they work public holidays.<\/span><\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">When Do Penal Rates Apply?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">There is no general rule around penal rates, so different kinds of employment agreements can have different variations that best fit the industry or type of work in question.<\/span><\/p>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">For instance, some agreements may provide that an employee is paid more when they work on a weekend day.<\/span><\/p>\n<\/div>\n\n\n\n<p><span style=\"font-weight: 400\">However, New Zealand does have specific rules for public holidays. When an employee works on a public holiday, they must be paid the greater of their:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><span style=\"font-weight: 400\">normal daily pay for the time worked on the day (<\/span><i><span style=\"font-weight: 400\">not<\/span><\/i><span style=\"font-weight: 400\"> including any penal rates in the employment agreement) plus half that amount again. This is called \u2018time and a half\u2019; or&nbsp;<\/span><\/li><li><span style=\"font-weight: 400\">normal daily pay for the time actually worked on the day (<\/span><i><span style=\"font-weight: 400\">including<\/span><\/i><span style=\"font-weight: 400\"> any penal rates in the employment agreement). The employee <\/span>does not<span style=\"font-weight: 400\"> <\/span>have <span style=\"font-weight: 400\">entitle<\/span>ment<span style=\"font-weight: 400\"> to time and a half on top of the penal rate.<\/span><\/li><\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">Note that current public holidays in New Zealand are:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">New Year\u2019s Day: Friday 1 January;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Day after New Year\u2019s Day: Monday 4 January;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Waitangi Day: Monday 8 February;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Good Friday: Friday 2 April;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Easter Monday: Monday 5 April;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Anzac Day: Monday 26 April;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Queen\u2019s Birthday: Monday 7 June;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Labour Day: Monday 25 October;<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Christmas Day: Monday 27 December; and<\/span><\/li><li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Boxing Day: Tuesday 28 December.<\/span><\/li><\/ul>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n    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As an employer, you must then pay the relevant rate set out in the <a href=\"https:\/\/legalvision.co.nz\/employment\/collective-agreement\/\">collective agreement<\/a> when the circumstances (weekends, public holidays etc) apply.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">While penal rates are less prominent in New Zealand than overseas, they are still a common feature of many employment agreements. Whether to include a penal rate in an agreement is often dependent on the working conditions of the roles in question, industry type, and other variable factors. <\/span><\/p>\n\n\n\n<div class=\"box box--border-line\">\n<p><span style=\"font-weight: 400\">It is almost always a good idea to get legal advice when negotiating a collective agreement.<\/span><\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p>I<span style=\"font-weight: 400\">f y<\/span>our employee&#8217;s employment agreement includes <span style=\"font-weight: 400\">penal rates, then you will have to pay them in the way set out in that agreement. A penal rate can be any additional amount <\/span>that <span style=\"font-weight: 400\">you and an employee <\/span>agree on<span style=\"font-weight: 400\">.<\/span> It outlines<span style=\"font-weight: 400\"> how much y<\/span>ou will <span style=\"font-weight: 400\">pay the employee for working a particular day or type of days. <\/span>They<span style=\"font-weight: 400\"> are not automatic and are <\/span>spelled out<span style=\"font-weight: 400\"> in employment agreements.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">They are different from \u2018time and a half\u2019 but are often associated with public holidays, where New Zealand law ensures that employees working on public holidays get \u2018time and a half\u2019 (or more, if they have a penal rate). If you want to know more about penal rates or negotiating collective agreements, contact <a href=\"https:\/\/legalvision.co.nz\/employment-lawyers-lp\">LegalVision\u2019s new Zealand employment lawyers<\/a> on 0800 005 570 or complete the form on this page.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1608771836731\"><strong class=\"schema-faq-question\"><strong>What is a penal rate?<\/strong><\/strong> <p class=\"schema-faq-answer\">A penal rate is an additional amount that you and the employee agree will be paid to the employee for working on a particular day, such as a public holiday.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1608771848239\"><strong class=\"schema-faq-question\"><strong>When do I have to pay penal rates?<\/strong><\/strong> <p class=\"schema-faq-answer\">It depends on the dates specified in the employment agreement or collective agreement.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1608771860537\"><strong class=\"schema-faq-question\"><strong>I worked on a public holiday. How much money am I owed?<\/strong><\/strong> <p class=\"schema-faq-answer\">At least &#8216;time and a half&#8217; in most instances. Your employment agreement should specify this. If not, New Zealand law specifies that the minimum you must be paid for working on a public holiday is time and a half.\u00a0<br \/><\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"5d238358bb\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/2375\" \/>            <input value=\"https:\/\/legalvision.co.nz\/employment\/do-i-have-to-pay-penal-rates\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Do I Have to Pay Penal Rates in New Zealand?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>As an employer, you will have to pay penal rates in some circumstances. A penal rate is when you pay an employee an extra amount on top of their wage or salary for working a particular day or \u2018class\u2019 of days, most commonly public holidays or weekends. However, these penal rates are generally set out<a href=\"https:\/\/legalvision.co.nz\/employment\/do-i-have-to-pay-penal-rates\/\">Continue reading <span class=\"sr-only\">&#8220;Do I Have to Pay Penal Rates in New Zealand?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13235,"featured_media":24,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[5],"tags":[24,25,54,324,417],"class_list":["post-2375","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","tag-startup","tag-small-business","tag-medium-business","tag-employer-obligations","tag-penal-rates"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Do I Have to Pay Penal Rates in New Zealand? 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Matt previously worked as an employment lawyer in a top-tier firm in New Zealand, and now works at the University of Auckland as a Research Fellow in the Faculty of Law.","sameAs":["anthony.lieu@legalvision.com.au"],"url":"https:\/\/legalvision.co.nz\/author\/mattbartlett\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/employment\/do-i-have-to-pay-penal-rates\/#faq-question-1608771836731","name":"What is a penal rate?","acceptedAnswer":{"@type":"Answer","text":"A penal rate is an additional amount that you and the employee agree will be paid to the employee for working on a particular day, such as a public holiday.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/employment\/do-i-have-to-pay-penal-rates\/#faq-question-1608771848239","name":"When do I have to pay penal rates?","acceptedAnswer":{"@type":"Answer","text":"It depends on the dates specified in the employment agreement or collective agreement.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/employment\/do-i-have-to-pay-penal-rates\/#faq-question-1608771860537","name":"I worked on a public holiday. How much money am I owed?","acceptedAnswer":{"@type":"Answer","text":"At least 'time and a half' in most instances. Your employment agreement should specify this. If not, New Zealand law specifies that the minimum you must be paid for working on a public holiday is time and a half.\u00a0<br \/>","inLanguage":"en-NZ"},"inLanguage":"en-NZ"}]}},"_links":{"self":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/2375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/users\/13235"}],"replies":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/comments?post=2375"}],"version-history":[{"count":9,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/2375\/revisions"}],"predecessor-version":[{"id":203019,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/2375\/revisions\/203019"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/media\/24"}],"wp:attachment":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/media?parent=2375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/categories?post=2375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/tags?post=2375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}