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Our Holidays Online Tool makes it easy to work out what pay and leave an employee is entitled to on public holidays. You can also use the tool to work out sick and bereavement leave entitlements. Make sure you have payroll information or a pay slip handy when you use the tool.
Before calculating the pay that an employee receives for a public holiday you need to consider these three factors:
- Would the employee have normally worked on the public holiday?
- What would the employee normally have been paid for that day?
- Does the employee actually work on the public holiday?
Payment when the employee does not work on a public holiday
The employee is entitled to be paid if the day would have been a normal working day. If the employee does not work on the public holiday they are entitled to be paid their “relevant daily pay” (see fact sheet: Calculating “relevant daily pay”). For employees working a regular pattern of hours, their pay cycle continues unchanged.
An employee who does not normally work on the day in question and who does not work is not entitled to a payment for the day. For example, a part-time employee who never works Friday has no entitlement to a payment for Good Friday.
Payment for public holidays
If an employee works on any public holiday, they should be paid at least time and a half for the time they actually work on a public holiday. Such an employee is entitled to the greater of:
- relevant daily pay less any penal rates plus half that amount again, or
- relevant daily pay including any penal rates
Penal rates are additional amounts detailed in an employment agreement to compensate an employee working on a particular day of the week (usually Saturdays or Sundays) or a public holiday.
Time and a half for work done on a public holiday
In most cases, it will be easy for you to calculate what time and a half means. For example, if the employee is paid an hourly rate, then he or she is entitled to one-and-a-half times that rate for the time worked on a public holiday, as in the following example:
“The pay rate for this position is $15 per hour. For time worked on a public holiday, the pay rate is $22.50 per hour (time and a half).”
In other cases there are a number of ways this can be done appropriately, depending on the wishes of the employer and employee. This may be a day rate, part day rate or hourly rate. The basis on which time and a half is calculated should ideally be included in the employee's employment agreement if they are likely to work on a public holiday.
For example, if a salaried employee has regular hours of work, then the relevant daily pay can be calculated by dividing the annual salary by 52 “to identify ordinary weekly pay” and then by the number of days worked per week to identify the relevant daily pay.
The amount of the time and a half payment should then be based on the portion of the normal day that the employee actually works.
For example, for an employee whose salary is $40,000 per annum, and who normally works five eight-hour days per week:
- weekly pay is $769.23 (salary divided by 52)
- the relevant daily pay is $153.85 (weekly pay divided by five)
- time and a half of the relevant daily pay is $230.78, if the employee works 8 hours on the public holiday.
The employee would be paid for the time actually worked on the basis of this amount. For example, if the above employee work half a day, they would need to be paid $115.39 (half of $230.78).
Where the person is specifically employed only to work on public holidays (for example, an employee who is only employed to work at the racetrack for the Waitangi Day meeting), they must still be paid at least time and a half.
Where the employee is working a shift that includes some time on the public holiday, only the time actually worked on the public holiday attracts payment of at least time and a half: the balance of the time worked may be paid at the normal rate of pay.
Where it is difficult to tell what an employee's time and a half rate would be, a Labour Inspector can help determine the employee's entitlement on a public holiday.
Examples: Where an employment agreement provides for penal rates
1. Double time in agreement
An employee is paid $15 an hour for normal working hours. The employment agreement provides for double time (an extra $15 per hour making $30 per hour in total) for working on Sundays. ANZAC Day falls on a Sunday and the employee works eight hours. Relevant daily pay will therefore be $30 X 8 = $240.
The employee will be entitled to the greater of EITHER:
Step 1
Calculate relevant daily pay. In this example it is $240 (30 hours (double time) x 8 hours (time worked) = $240)
Step 2
Deduct any penal rates. In this example the employment agreement provides for an extra $15 an hour to be paid to the employee for working on Sundays ($15 (normal pay rate) x 8 (time worked) = $120)
Step 3
Multiply that amount by one and a half ($120 (total of step 2) x 1.5 (time and a half) = $180 (time and a half rate)
OR
- relevant daily pay = $240 (penal rate)
In this example, the penal rate provided under the employment agreement is greater than the time and a half rate under the Holidays Act 2003, so the employee is entitled to $240
2. Time and a quarter in agreement
An employee is paid $15 an hour for normal working hours. The employment agreement provides for time and a quarter for working on Saturdays (an extra $3.75 per hour making $18.75 in total). ANZAC Day falls on a Saturday and the employee works eight hours on that day at the time and a quarter rate. Relevant daily pay will therefore be $18.75 x 8 = $150.
The employee is entitled to the greater of:
Step 1
Calculate the relevant daily pay. In this example it is $150 (18.75 hours (time and a quarter) x 8 hours (time worked) = $150).
Step 2
Deduct any penal rates. In this example the penal rate is an extra $3.75 an hour for eight days ($15 (normal pay rate) x 8 (time worked) = $120).
Step 3
Multiply that amount by one and a half ($120 (total of step 2) x 1.5 (time and a half) = $180 (time and a half rate)
OR
- relevant daily pay = $150 (penal rate)
The penal rate provided under the employment agreement is lower than the time and a half rate under the Holidays Act 2003. Therefore the employee is entitled to $180 - the time and a quarter rate is effectively topped up to time and a half.
How do you pay time and a half where the employees are paid on a piece rate basis?
The Holidays Act provides that an employee is to be paid at least time and a half of their relevant daily pay that relates to the time actually worked. For an employer who pays by the piece, the best way to do this is to determine how much the employee actually earned on the straight piece rate for the day and then add half that rate again.
For example, an employer pays $25 per bin of apples, plus $100 extra for working on a public holiday. If the employee picks 10 bins:
The employee will be entitled to the greater of EITHER:
Step 1
Calculate the relevant daily pay. In this example it is 10 bins at $25 each, and $100 extra for working on the public holiday ($25 (pay per bin) x 10 (number of bins) + $100 (extra payment) = $350 (penal rate)).
Step 2
Deduct any penal rates. In this example it is $100 paid to the employee for working on the public holiday ($350 (penal rate) - $100 (extra payment) = $250).
Step 3
Multiply this amount by one and a half ($250 (total of step 2) x 1.5 (time and a half) = $375 time and a half rate))
OR
Their relevant daily pay. Which is in this example $350 (penal rate).
The employer must therefore pay the employee $375 because this is the greater amount.
The implications for employment agreements
Employment agreements must specifically provide that an employee will receive at least time and a half for working on a public holiday. This applies to all employees, including salaried employees.
Example of required clause:
“If the employee works on a public holiday they will be paid at the rate of time and a half for hours worked as set out in section 50 of the Holidays Act 2003.”
An employment agreement cannot specify that the rate of pay already includes a component for time and a half.
Some employment agreements specify a salary rate with unspecified hours or patterns of work, or set specific wage rates for public holidays. Employees on such agreements must be paid at least time and a half if they work on a public holiday.
Where the person is specifically employed only to work on public holidays (for example, an employee who is only employed to work at the racetrack for the Waitangi Day meeting), they must still be paid at least time and a half.
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This page was last updated on:
22-Apr-2010
and is current. |
