Leave and holiday entitlements during COVID-19
Employees may be entitled to paid days off on public holidays, if they are sick or have suffered a bereavement, and when they take alternative holidays, if the day is a day they would have otherwise worked. Payment is determined using either relevant daily pay (RDP) or average daily pay (ADP).
For working on a public holiday employees must be paid at least time and a half and this provision must be included in employment agreements.
When payments must be made
An employer must pay an employee:
- for a public holiday in the pay that relates to the pay period in which the holiday falls
- for an alternative holiday which is taken, in the pay that relates to the pay period in which the alternative holiday is taken
- for sick leave or bereavement leave, in the pay that relates to the pay period in which the leave is taken (except if proof of sickness or injury is required and the employee has not provided this without reasonable excuse, then the employer doesn’t have to pay the employee for the sick leave until proof is provided.
Payment for unworked public holidays, alternative holidays, sick and bereavement leave
For unworked public holidays, alternative holidays, sick and bereavement leave employees are paid at the rate of relevant daily pay except in two specific circumstances where an employer may choose to use average daily pay.
Employers may use average daily pay (‘ADP’) only if:
- it’s not possible or practicable to calculate the employee’s relevant daily pay, or
- the employee’s daily pay varies in the pay period where the holiday or leave falls.
This means that if the employee’s daily pay varies in the pay period they have a choice of using RDP or ADP.
Estimating ADP or using ADP instead of RDP in a situation where there is no choice will not comply with the Holidays Act 2003 and may lead to an employee’s pay being incorrect.
For information on using RDP and ADP, see Relevant daily pay and average daily pay.
Annual holidays are calculated differently.
Public holidays
For public holiday rights, there are a number of things to work out:
- on which day the public holiday will be observed for each employee, if it’s a public holiday that might be Mondayised (or Tuesdayised)
- whether or not the day is an otherwise working day for the employee
- whether or not the employee will be working on the day
- how much the employee will be paid for the day
- whether the employee is entitled to an alternative holiday
Payment for working on a public holiday
For working on a public holiday (regardless of whether it’s an otherwise working day for the employee), all employees must be paid (at least) the greater of:
- the employee’s relevant daily pay or average daily pay (if applicable) for the time actually worked on the day (not including any penal rates in the employment agreement that relate to that day) plus half that amount again (time and a half), or
- the employee’s relevant daily pay (or average daily pay) that relates to the time actually worked on the day (including any penal rates in the employment agreement). The employee isn’t entitled to time and a half on top of the penal rate.
Read more about relevant daily pay and average daily pay. If an employer estimates instead of doing the calculations, it may lead to payment being worked out incorrectly.
A penal rate is an additional amount that the employer and employee agree will be paid to the employee for working on a particular day or type of day. Penal rates are usually specified in employment agreements. Examples of penal rates for the purposes of calculating payment for working on a public holiday include additional rates for working on Saturdays or Sundays, or public holiday rates.
Allowances, such as wet weather allowance, shift allowance, night rates, overtime rates and special rates for working a sixth or seventh day are not penal rates for the purposes of calculating payment for working on a public holiday.
If the employee is working on the public holiday, they should be paid on the basis of relevant daily pay (rather than average daily pay). This is because:
- employers will always be able to work out relevant daily pay when the employee actually works on the public holiday
- employees generally expect to be paid relevant daily pay
- using relevant daily pay (where this can be calculated) will always comply with the Holidays Act 2003.
All employment agreements must specify that the employee will be paid time and a half (at least) for working on a public holiday.
An employee may be paid more than time and a half if it is in their employment agreement. For example, the agreement might contain penal rates that state payment is at double-time for working on a public holiday, but the agreement can’t give the employee less than time and a half.
If an employment agreement requires an employee to be available to work public holidays that are not within their agreed and guaranteed hours, this must be covered by an availability clause in the employment agreement and the employee must be paid reasonable compensation unless they have agreed that reasonable compensation is included in their salary. The employer must also have genuine reasons based on reasonable grounds for including an availability provision and for requiring the employee to be available on the public holiday. For more information about availability provisions, see Hours of work.
If an employee’s employment agreement doesn’t require them to work on public holidays, but their employer has asked them to work, the employer should make sure they know they don’t have to.
Working on a public holiday that is an otherwise working day
If an employee works on a public holiday and it is an otherwise working day for them (and they are not only employed to work on public holidays) they also get an alternative holiday. If an employee works only on public holidays (eg an employee is only employed to work at the racetrack for the Waitangi Day meeting) they don’t get an alternative holiday, but must still be paid at least time and a half for the hours they work on a public holiday.
Working out public holiday entitlements
You can use our table to work out public holiday entitlements. Before you use this table, use our Mondayisation of public holidays flowchart to determine which day the public holiday will be observed for the employee.
| Public holiday entitlements table | The day is an otherwise working day for the employee | The day isn't an otherwise working day for the employee |
|---|---|---|
| The employee works on the public holiday (including if the employee is on call and is called out) |
The employee gets:
a full day’s alternative holiday (unless the employee is only employed to work on public holidays). |
The employee gets
|
| The employee doesn’t work on the public holiday |
The employee gets:
|
The employee:
|
| The employee is on call on the day but doesn’t get called out (ie doesn’t work on the public holiday) |
The employee gets:
|
The employee gets:
|
If you can’t work out or agree what an employee’s pay for a public holiday should be, contact us for help.
Public holiday scenarios
Ella is a salaried employee who works the same hours each day and the same days each week. In her case her employer works out her daily rate by dividing her annual salary by 52, and then by the number of days worked each week.
Ella’s gross salary is $40,000 per year and she works five 8-hour days per week:
- her weekly pay is $769.23 (40,000/52)
- her relevant daily pay is calculated at $153.85 (769.23/5)
- time and a half of the relevant daily pay is $230.78 (153.85 x 1.5).
Ella is paid for the time she actually worked on the public holiday on the basis of $230.78 per day. For example, if she works only half a day, she gets paid $115.39 (half of $230.78). Ella would also get a full 8-hour alternative holiday if she would have normally worked on the day, no matter how many hours she worked on the public holiday.
Rima has regular hours each week, and is paid an hourly rate and no additional payments. Her employment agreement says: “The pay rate for this position is $18 per hour. For time worked on a public holiday, the pay rate is time and a half.”
Rima will get paid $27.00 ($18 x 1.5) for each hour she works on the public holiday.
Jane usually only works on Saturday and Sunday, but she agrees to work on Labour Day this year even though she would not otherwise work on that day. She is normally paid $25 an hour but her employment agreement says she will be paid $35 an hour and get an alternative holiday if she works on a public holiday.
Under the Holidays Act 2003, the minimum Jane would get paid for working a public holiday is $25 x 1.5 = $37.50 per hour. Because this is more than the $35 per hour for working on a public holiday stated in her employment agreement she must be paid $37.50 an hour. Jane doesn’t qualify for an alternative holiday under the Holidays Act 2003 (because Monday is not an otherwise working day for her) but she gets an alternative holiday because it is stated in her employment agreement.
Pete works on an ANZAC Day that falls on a Sunday (Sunday is a normal working day for Pete and his employment agreement requires him to work on public holidays). Pete normally earns $20 an hour and his employment agreement gives him double time for working on a Sunday.
Under his employment agreement Pete would get 2 x $20 = $40 an hour for the time he works on ANZAC Day.
Under the Holidays Act 2003 the minimum Pete would get is $20 x 1.5 = $30 an hour for the time he works on ANZAC Day.
Pete gets more under his employment agreement than the Holidays Act 2003 so he would be paid $40 an hour (he would also get an alternative holiday because Sunday is an otherwise working day for him).
Matt is part-time and works on average 16.5 hours per week across 3 shifts. The days of the week he works on and the length of each shift varies from week to week. He doesn’t have penal rates for public holidays or Sundays in his employment agreement.
Sunday is a public holiday and Matt is rostered to work for 6 hours. Matt’s relevant daily pay is easy to calculate because he is working on the day (although his employer could choose to pay him average daily pay because his daily pay varies in the period).
Matt is paid the portion of his relevant daily pay for the hours he works (ie 6 hours at his hourly rate), multiplied by one and a half. He will also receive a paid alternative holiday.
If Matt’s employment agreement gave him double-time for working on a Sunday or a public holiday (penal rates), then both calculations would need to be done. Matt would be paid the greater of:
- the portion of his relevant daily pay (not including any penal rates) that relates to the time he works, plus half that amount again, or
- the portion of his relevant daily pay that relates to the time he works (including his penal rate provision of double time).
In this situation because double time will be greater than time and a half, Matt must be paid his double time.
Working on Easter Sunday (not a public holiday)
If an employee works on Easter Sunday, they would generally be paid their ordinary rate of pay for a Sunday unless they have agreed to a different rate with their employer.
If an employee doesn’t work on Easter Sunday:
- because their workplace is closed because of shop trading hours restrictions, and
- Sunday is a normal day of work (otherwise working day) for them, then
what they get paid for that day would depend on the terms and conditions of their employment agreement. Usually, if an employee is able to work on a day that is a contracted day of work for them, then the employer has to provide them with work for that day. If the employer doesn’t provide the employee with work (eg stocktaking while the shop is closed) they may have to pay the employee what they would have been paid if they had worked that particular day (unless the employment agreement says otherwise).