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All business owners will know that running a business is not easy. One of the main challenges business owners face is managing their employees and creating a good work culture. One of the ways to improve this is by giving your employees sufficient breaks throughout the year. The New Zealand government mandates this through the use of public holidays. Accordingly, no business should require their employees to work on public holidays unless specified in the employment agreement. This article will explain what holiday pay is and whether your employee is entitled to it on a public holiday. 

What Is Holiday Pay?

Holiday pay is a type of pay you can grant employees who have not worked at least 12 months for your business. This is because those employees are not yet entitled to annual leave. As an employer, you cannot pay your employees holiday pay unless they quit or are on a casual contract. Once an employee has works in your business for 12 months, you grant them annual leave. Therefore, holiday pay is not applicable. 

In New Zealand, holiday pay is usually 8% of an employee’s gross earnings.

What Is a Public Holiday?

There are currently 11 public holidays in New Zealand. You must not require your employee to work on a public holiday unless your contract states otherwise, and it is a day that your employee would usually work. 

Additionally, public holidays are Mondayised. This means that New Zealand employment law considers the Monday after a public holiday if it falls on a weekend. However, this does not mean that your employee can take two public holidays. 

What Is Annual Leave?

Annual leave is a type of leave that an employee accumulates over time. In New Zealand, employees are entitled to four weeks of annual leave for every year they work at your business. Your employees can take annual leave anytime as long as they provide sufficient notice and you permit their leave. 

Taking Leave on a Public Holiday

A large proportion of businesses in New Zealand close during the period of Christmas and New Year. This is considered a shutdown period, and most employees are expected to be away from the office. Therefore, employees will take annual leave during this time. However, there are also several public holidays during this period. So, are employees expected to take annual leave on these days?

The answer is no. Your employees do not need to take annual leave on a public holiday. If an employee would usually have worked on that day, you would pay them as usual, and your employee does not lose a day of annual leave. This means that you do not pay your employees holiday pay. Instead, they receive a paid public holiday. However, if an employee does not usually work on the public holiday, they cannot receive any payment for that day. Likewise, they will not need to use any of their annual leave. 

Working on a public holiday

If an employee works on a public holiday, you should pay them time and a half. This means they should receive 50% more than their usual pay for that day of work. They are also entitled to a day in lieu, a paid day off that they can take later. They do not have to take any annual leave for this day. 

Key Takeaways

Your employees are entitled to annual leave if they work continuously for your business for 12 months. If not, they accrue holiday pay which you only pay out once that employee decides to quit or are on a casual contract. Holiday pay is usually 8% of an employee’s earnings. Additionally, your employees can take annual leave anytime, as long as your business allows for this leave. For example, they can take annual leave over public holidays, but this will not count as taking a day off for annual leave. Instead, they are entitled to a full paid day if they would have usually worked on that particular day. If an employer would not have usually worked that day, they do not need to take a day of annual leave.  

For any legal assistance with managing your employees’ leave entitlements, contact LegalVision’s employment lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is holiday pay?

Holiday pay is a type of pay you can grant employees who have not worked at least 12 months for your business. This is because those employees are not yet entitled to annual leave.

Can I require my staff to work on a public holiday?

You can only do this if the employment agreement with the particular employee in question allows this situation. Therefore, check the employment agreement before asking any of your employees to work on a public holiday.

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