Understanding Payment for Public Holidays in New Zealand: A Guide for Employers and Employees
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Tempus Payroll is a managed Payroll Solution - brought to you by the team at Payroll Intelligence. We co-pilot your Tempus account with you. This means the complicated setup and app configurations are done by us. You focus on just timesheets… and actually running your business. We manage the processing of your payroll on “Payroll Day”. And yes… that includes IRD PayDay filing. We can even process payments (pretty quickly too) using the Akahu platform. To find out more about Tempus Payroll - visit payrollbytempus.com
Understanding Payment for Public Holidays in New Zealand: A Guide for Employers and Employees.
In New Zealand, public holidays are not only a time for rest and celebration but also come with specific entitlements for employees concerning pay and leave. The Holidays Act 2003 provides clear guidelines on how employers should compensate employees during these holidays. This blog post explores the key aspects of payment for public holidays in New Zealand, offering both employers and employees a comprehensive understanding of their rights and obligations.
What are the Recognised Public Holidays?
New Zealand recognises several public holidays, including Christmas Day, Good Friday, Easter Monday, ANZAC Day, King's Birthday, Matariki, and Labour Day, among others. Additionally, each region observes its anniversary day. It's essential for both employers and employees to be aware of these dates as they vary each year.
Tempus Payroll can be configured to suit a national workforce with public holiday observations down to an individual employee level. Because public holiday observations can be tailored per employee - Tempus also caters to scenarios where a transfer of a whole public holiday is required. Tempus can also be configured for custom holidays for your organisation, for example a company wide ‘picnic’ day.
Right to a Paid Day Off.
One of the primary rights under the Holidays Act is that if a public holiday falls on a day an employee would usually work (“otherwise working day”), they are entitled to a paid day off. This payment is to be at valued at the equivalent of ‘relevant daily pay’ or ‘average daily pay’. Using either of these payments ensures the employee isn’t financially worse off due to the public holiday.
Tempus Payroll calculates both RDP and ADP and intelligently selects the calculation method preference set per employee. Naturally we check both the rates calculated in context of what the user might have otherwise earnt - to ensure the amount calculated reflects their typical earnings.
Payment for Working on a Public Holiday.
If an employee works on a public holiday that falls on a day they would normally work, they must be paid at least time and a half for the time worked. In addition to this, they are also entitled to one (1.00) Alternative Holiday. This Alternative Holiday gives the employee another paid day off, to be taken at a later date.
Tempus comfortably handles the most complex payment interpretations on public holidays at different rates (e.g. if your employee earns different hourly rates during a shift). We can even ensure that shifts spanning midnight (e.g. 24/7 operations) are split correctly - to ensure only the time worked on the public holiday gets paid at the 1.5x multiplier rate, and the remainder of the time is paid at the normal 1.0x multiplier.
Conditions for Alternative Holidays.
An Alternative Holiday is granted when an employee works on a public holiday. However, this is only applicable if the public holiday falls on a day they would normally work. Even if an employee is on call but does not get called in, they still might be entitled to an alternative holiday, depending on their agreement or employment conditions.
What if an employee’s rostered days are variable? You may have to review the prior 12 ‘Mondays’ to inform your decision on whether this public holiday was an Otherwise Working Day. Employees in Tempus can be configured for a working pattern of up to 12 consecutive weeks - so it’s perfect for teams with rotating rosters and effortlessly analyses the past 12 ‘Mondays’. The length of the review period can also be customised for your organisation, in case you want to review more than 12 for your own reasons. Naturally our experts check these OWD determinations and override system decisions based on our interpretation - never trust payroll technology alone! Tempus can also be configured for your “on call” scenarios - e.g. we can set up a pay category to pay a flat rate + trigger 1.00 Alternative Holiday owed under the law.
Handling Casuals and Part-Time Employees.
Shift workers and part-time employees also have specific rights under the Holidays Act. Even if their work schedule is irregular, if there is a pattern of work that has been established over time where the public holiday falls on a day they would typically work, then they are entitled to the same benefits as regular employees.
Tempus generally contains all the data necessary for us to review and determine if a part time employee, or a casual (with/without a regular working pattern) would have typically worked the calendar day in question. (Remember, just because someone’s annual leave is paid at 8%, doesn’t mean they automatically miss out on public holidays!) We then apply our expertise to determine if a particular public holiday worked shift should trigger an Alternative Holiday to be accrued.
Conclusion.
Understanding and adhering to the requirements of the Holidays Act 2003 regarding public holidays is crucial for maintaining fair work practices and ensuring compliance with New Zealand law. There are so many considerations at play, it’s sometimes difficult to determine what the complaint decision is. We have had three public holidays in the past 30 days. If payroll is taking too much of your valuable time or you are worried you might have gotten it wrong - reach out to the team at Payroll Intelligence about how Tempus Payroll can help.