Holiday Pay and Entitlement over Easter 2020 - during the Covid-19 Lockdown
About the Author:
Paul Wilton (editor)
CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers.
An employee can be required to work on a public holiday only if the individual would otherwise have worked on that day and if the employment agreement requires the person to work on public holidays. In all other circumstances, employees need only work on a public holiday if they agree to do so and this should be recorded in writing.
Upcoming public holidays are:
10 Apr Fri Good Friday
13 Apr Mon Easter Monday
Note, Easter Sunday is not a public holiday in New Zealand.
Public Holiday Pay
Employee doesn't work on the public holiday
An employee must be paid for a day off on a public holiday if it falls on a day that the employee would otherwise have worked.
If there is a public holiday when employees are on annual leave, they get paid for the public holiday if they would normally have worked on that day, and they do not lose an annual leave day.
The Ministry of Business Innovation & Employment (MBIE) has clarified the position regarding leave entitlements and pay:
Employees who would normally work on a Friday or Monday should be paid for these public holidays this Easter.
This should be based on pre-COVID-19 working patterns, unless an alternative permanent arrangement has been agreed
Payment should be Relevant Daily Pay, or if it meets the criteria, can be Average Daily Pay
The wage subsidy can be used to cover some or all of their employees’ wages, including pay for the upcoming public holidays.
The Holidays Act allows payments to be based on relevant daily pay (RDP). This is "the amount of pay that the employee would have received had the employee worked on the day concerned". This would normally be the amount that an employee would otherwise have received had it not been a public holiday.
Note that any deviation from your legal pay obligations due to hardship suffered by your business at this time must be negotiated with employees in good faith.
Employee works on the public holiday
Employees who work on a Public Holiday are entitled to one and a half times their pay for that day (or more, if so agreed). If they would normally work on that day, they must also receive a ‘Day in Lieu’. This means that they can take another day as a holiday and be paid for it.
You cannot contract out of this requirement, even if you offer to pay double or triple pay for working on a Public Holiday. Again, in the absence of further guidance, ordinary pay will be based on the RDP, i.e. what the employee would have received had the employee worked on the day concerned.
The following is from Employee NZ:
If the employee does work on the public holiday:
it will always be possible and practicable to determine RDP
it will always be compliant with the Act to apply RDP
it is likely that the employee will expect that RDP will be used to calculate payment therefore it is recommended that RDP be used to calculate payment in all situations where an employee works on a public holiday.
Nonetheless, if you have reason to do so, consult your employees and negotiate any deviation from the Act in good faith.
Note: If ongoing work conditions, hours or other aspects of the employment agreement need to change to the extent that the job will no longer be substantially the same as what it was before, the employer will need to follow a fair restructuring process, even if it is not the intention to disestablish the position.
We remind you that minimum pay increased on 1 April to 18.90 an hour, and the training and start-out wage is 80% of that, being $15.12.
FBA Editor
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