Know the holiday season's entitlements

This time of year the Employers Chamber of Commerce telephone advice line is busier than normal, and many of the questions are about employee entitlements to holidays and leave.

The Holidays Act 2003 gives employees a set of minimum entitlements to annual holidays, public holidays, sick leave and bereavement leave.

It also sets out how leave and holidays should be paid. Contractors are not covered by the legislation.

Employers should also check employment agreements carefully, as they may contain entitlements over and above those in the Holidays Act.

Which days are public holidays?

This year Boxing Day (December 26) and January 2 fall on Mondays. Those holidays will be paid days off if they are days on which, but for the public holiday arising, an employee would otherwise have been at work.

If an employee doesn't normally work on Mondays, then he or she has no entitlement to be paid for either day as a holiday.

Christmas Day and New Year's Day fall on Sundays and because of that, the rules are slightly different. Employees who normally work Sundays will observe the holidays on the days on which they actually fall, while those who do not will enjoy the holidays on the following Tuesdays (as the Mondays are already taken by other public holidays). If an employee does not normally work on Tuesdays or Sundays, there is no entitlement to payment for these holidays.

The effect of the act is that seven-day businesses will pay some staff for Christmas Day on 25 December (those employees who normally work Sundays) and others on 27 December (those employees who do not normally work Sundays, but do normally work Tuesdays). If an employee works both Sundays and Tuesdays, then the holidays are recognised on the Sundays only.

Payment for work on public holidays

In simple terms, if an employee works on a public holiday, he or she should not be paid any less than what would otherwise have been earned, and all hours actually worked require payment at a rate not less than time and one half. So, for example, if an employee normally works eight hours on a Monday but only works three hours on Boxing Day, he or she would be paid three hours at not less than time and a half, and five hours at the usual rate of pay.

Alternative holidays

If an employee works on a public holiday and that day meets the "otherwise working day" test, then he or she will also become entitled to an alternative day's holiday.

There is no correlation between payment for an alternative holiday and the time actually worked on the public holiday that gave rise to it.

Payment is required at not less than what the employee would have been paid for working on the day taken as the alternative holiday. So, if an employee worked three hours on the holiday and the employer agrees that he or she can take the resulting alternative holiday on a day on which 12 hours are usually worked, then that employee will be paid 12 hours.

Nichola Hutchinson, Employers Chamber of Commerce Central. Email Nichola.hutchinson@eccc.org.nz