Payment for working on a public holiday
The starting point for payment for working on a public holiday is the employee’s relevant daily pay or average daily pay (see the "Definitions" box). If an employee works on any public holiday, that work is paid a minimum payment of time and a half for the time they actually work on the day. From 1 April 2011, an employee is entitled to the greater of either:
- the portion of the employee’s relevant daily pay or average daily pay (if applicable) that relates to the time actually worked on the day, less any penal rates, plus half that amount again (time and a half), or
- the portion of the employee’s relevant daily pay that relates to the time actually worked on the day including any penal rates.
The only time an employer may choose to use average daily pay, to calculate an employee’s pay for working on a public holiday, will be when that employee’s daily pay varies in the pay period in question. This is because the trigger for using average daily pay for the reason that it is ‘not possible or practicable’ to determine relevant daily pay will never be met when the employee actually works on the public holiday.
If the average daily pay varies in the pay period and the employer chooses to use average daily pay to determine the employee’s pay for working on a public holiday, the employer must work out the portion of the employee’s average daily pay that relates to the time actually worked on the day (minus any penal rates) and then multiply by 1.5. This figure must be compared to the employees’ relevant daily pay (including any penal rates) and the employer must pay the greater amount.
Refer to the “Examples” box to see how time and a half of relevant daily pay or time and a half of average daily pay may be calculated.
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 the minimum time and a half payment; the balance may be paid at the normal rate of pay. That is unless the employee and employer agree to transfer the public holiday so that it covers one whole shift (see the section on “Transferring 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), there is no entitlement to an alternative day’s holiday, but the employee must still be paid at least 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 for the time actually worked if they work on a public holiday.
Employment agreements can also include specified penal rates for particular days worked – for example, double time for working on a Sunday. Where a public holiday falls on such a day, the employee is entitled to the portion of their relevant daily pay that relates to the time actually worked on the day, including any penal rate in the employment agreement, or time and a half of the portion of relevant daily pay or average daily pay that relates to the time actually worked on the day excluding any penal rate, whichever is the greater. They are not entitled to time and a half on top of the penal rate in the employment agreement.
Therefore, an employee who works on an ANZAC Day that falls on a Sunday, and who is entitled under their employment agreement to double time rates on Sunday, receives double time, as the double time rate is more than the time and a half provided for in the Holidays Act.
Example: using relevant daily pay to calculate payment for working on a public holiday:
If a salaried employee has regular hours of work, the relevant daily pay can be calculated by dividing the annual salary by 52, and then by the number of days worked. 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
- the relevant daily pay is $153.85 (weekly pay divided by five)
- time and a half the relevant daily pay is $230.78.
The employee would be paid for the time actually worked on the basis of this amount. For example, if the above employee worked half a day, they would need to be paid $115.39 (half of $230.78). Where it is difficult to tell what an employee’s pay for a public holiday would be, a Labour Inspector can help determine the employee’s entitlement on a public holiday.
Example: using average daily pay to calculate payment for working on a public holiday:
If an employee’s varies within a payment period, the average daily pay calculation may be used.
For example, a part-time employee earns $23,000 annually by working 16.5 hours per week across three shifts. If the employee’s normal Monday shift is 6 hours and Monday is a public holiday, the employer may choose to use the average daily pay. The employer must determine the portion of employee’s average daily pay that relates to the time actually worked on the day (minus any penal rates) and then multiply by 1.5. One way of doing this would be as follows:
- total gross earnings = $23,000
- hours per week =16.5 hours; total number of hours worked in 52 weeks = 52 weeks x 16.5 shift hours per week = 858 hours
- average hourly rate = $23,000 divided by 858 hours = $26.80 per hour.
- pay for the public holiday worked = $26.80 x 6 hours for the public holiday shift x 1.5 for time and a half =$241
If there is any dispute, a Labour Inspector can determine the matter for the parties.
