Understanding the Holidays Act – When Employees Work on Public Holidays

3 October, 2014 | Carolyn Ranson

Figuring out what you are, or your employee is, entitled to by law when working on a public holiday has its challenges. But, it is worth getting it right!

Any employee who works on a public holiday must be paid at a minimum of time and a half for the time they actually work on the day.  Where an employee’s pay varies, then the amount payable to the employee in respect of the public holiday will be one and a half times the average daily pay (less any penal rates) that relates to the time actually worked on the day.

The average daily pay is calculated in accordance with the following formula:

A ÷ B

where A = employee’s gross earnings for the 52 calendar weeks before the end of the pay period immediately before the calculation is made; and

where B = number of whole or part days during which the employee earned those gross earnings, including any day on which the employee was on a paid holiday or paid leave but excluding any other day on which the employee did not actually work.

The average daily pay is the amount that would be paid to the employee plus half as much again.

Penal rates refers to any identifiable additional amount that is payable to compensate the employee for working on particular day of the week or a public holiday but does not include, for example, any additional payment for a sixth or seventh day of work.

In addition to the time and a half payment requirement, every employee who works on a public holiday which would normally have been a working day, is entitled to another days holiday in lieu (an alternative holiday).  The alternative holiday must be paid at the average daily rate.

Click here to learn more about the holiday act in our guide to staff holidays over Christmas and New Year.

If you would like advice on any employment law related matters, please contact Suzanne Sumner, Personal Assistant to employment law expert, Carolyn Ranson to find out how you can become a client of Smith and Partners and to set up an appointment to discuss your employment matter with Carolyn.

Suzanne Sumner
Ph: 09 837 6840
Email: Suzanne.sumner@smithpartners.co.nz
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