If an employee has had to work on a public holiday, an alternative holiday gives them a day off at another time. Some people call alternative holidays ‘lieu days’ or ‘days off in lieu’ but those terms can also refer to other types of leave so it is recommended to call alternative holidays by their correct name.

When an employee becomes entitled to an alternative holiday

An employee gets an alternative holiday if:

  • they work on a public holiday that would otherwise be a working day for them. If an employee works on a public holiday that would not otherwise be a working day for them, they are not entitled to an alternative holiday, but they are still entitled to be paid at the rate of at least time and a half for the hours they work, as discussed in the example below
  • they are on call on a public holiday that is an otherwise working day for them and they have to limit their activities on the day to the extent that they haven’t enjoyed a full holiday. For example, if the employee is required to stay at home all day, but is not called out, the employee is entitled to a full day’s paid alternative holiday if they would have otherwise worked on that day.

The employee has the whole working day off work on the day they take an alternative holiday, regardless of how many hours they worked on the public holiday which gave them their entitlement to the alternative day.

For example, an employee normally works eight hours every Monday, but on a public holiday which falls on a Monday, they only worked for two hours. They get paid for the two hours worked at the rate of at least time and a half for working on the public holiday. They also get a whole working day off as an alternative holiday, on full pay. This means that if they take the alternative holiday on a day that they would otherwise have worked eight hours, they would be paid for the full eight hours for the alternative holiday.

Remember if an employee works on a public holiday which is not an otherwise working day for them, they must be paid for the hours they worked at no less than time and a half, but they are not be entitled to an alternative holiday.

Taking an alternative holiday

The employee can take an alternative holiday on a day that:

  • is agreed with their employer, and
  • would otherwise be a working day for them, and
  • which isn’t a public holiday.

If the employer and employee can’t agree when the employee can take the alternative holiday, the employer may choose the day:

  • but it must be reasonable, and
  • the employer must give the employee at least 14 days’ notice of the date they have to take the day.

An employee can ask for an alternative holiday to be paid out if:

  • 12 months has passed since the employee became entitled to the alternative holiday, and
  • the employee has not yet taken the alternative holiday.

When an employee doesn’t get an alternative holiday

Employees don’t get an alternative holiday if they:

  • work on a public holiday and that day would not otherwise be a working day for them, or
  • are on call on a public holiday but are not required to restrict activities, and they are not called out (so don’t work), or
  • are only employed to work or to be on call on public holidays. For example an employee who is only employed to work at the racetrack for the Waitangi Day meeting has no entitlement to an alternative holiday, but the employee must still be paid at least time and a half for the hours they work on the public holiday.

Pay for taking alternative holidays

An employee is paid at least their relevant daily pay (or may be paid average daily pay if applicable) for the hours that they would have worked on the day they take the alternative holiday. For example, an employee gets an alternative holiday for working three hours on Easter Monday and they take their alternative holiday on the following Friday (and they would usually work eight hours on a Friday). The employee must be paid the amount that they would have received had they worked on that particular Friday, ie they would receive pay for eight hours.

Payment for alternative holidays taken must be made in the pay for the period when the holiday is taken.

Pay for public holidays, sick and bereavement leave and alternative holidays has information on how to calculate alternative holiday payments.

Alternative holidays may be paid out

If an employee doesn’t take an alternative holiday within 12 months of becoming entitled to it, the employee and employer may agree for the alternative holiday to be paid out. The payment amount must be agreed by the employer and employee and must be made as soon as practicable once the agreement has been made.

Alternative holidays remaining at the end of employment

Alternative holidays do not expire. Unless they have been taken or paid out the employee is still entitled to them. If an employee is entitled to  an alternative holiday that they haven’t taken when they leave their employment with their employer, they are paid out for the alternative holiday at the rate of their relevant daily pay (or average daily pay if applicable) for their last day of employment. The payment must be made in the pay for the final period of employment.

Final pay has information when an employee is leaving employment and their employer calculates their final pay.