Paying public holidays correctly

Here are six scenarios to demonstrate what you should pay for a public holiday.

1. Day off on public holiday

If a public holiday falls on the day your employee usually works and they have the public holiday off work, they are paid for that day as if they had worked as normal on the day. The employee’s relevant daily pay is paid. Or, in situations where it’s not possible or practicable to calculate the relevant daily pay or the daily pay varies over the pay period in question, the employee’s average daily pay may be paid.

If it is not a day they usually work, the employee is not entitled to a paid public holiday

2. Working on a public holiday

If an employee works on a public holiday they are entitled to at least time and a half pay for the time they actually work on the public holiday. You may agree to a higher rate in the employment agreement (see below).

You must also provide a whole day’s alternative holiday at a later date if the public holiday is a day they would usually work.

For example, Bob usually works on a Friday and you require him to work half a day (four hours) on Good Friday. In this case, you will need to pay Bob time and a half for the four hours he worked on this day and give him another whole paid day off sometime during the year.

An alternative holiday is paid at the employee’s relevant daily pay (or average daily pay if applicable) for the day taken off. The alternative holiday can be taken at any time mutually agreeable to you and the employee.  If you and the employee can’t agree when the alterative holiday is to be taken, you may determine the day, on a reasonable basis.  You must give the employee 14 days notice of the requirement to take their alternative holiday.  If the alternative holiday isn’t taken within 12 months you can agree to exchange the alternative holiday for cash.

3. Specifically employ someone to work public holidays

If you employ somebody specifically to work on public holidays only, you must pay them at least time and a half for the hours worked. Entitlement to an alternative holiday does not apply if the person has an employment relationship with the employer to only work on a public holiday.

4. Public Holidays and Penal Rates

You must pay employees at least time and a half if they work on a public holiday, however, employment agreements may include specified penal rates. Penal rates are additional amounts in an employment agreement to compensate an employee working on a particular day or type of day, for example Saturdays or Sundays, or a public holiday.

Where an employment agreement provides for penal rates, the employee is entitled to the greater of:

So you need to work both out and then apply whichever is the greater amount.

For example, 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.

5. Public holidays and shift workers

If your 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; you can pay the balance at the normal rate of pay. They are still entitled to a full day’s alternative holiday.

You can agree with your employees to transfer a shift that crosses into or out of a public holiday. See the Holidays and Leave booklet for further information and examples of how entitlements apply to shift workers.

6. Payment where an employee is sick or bereaved on a public holiday

If your employee would have been working on a public holiday but is sick or bereaved, the day would be treated as a paid unworked public holiday.
So in this case:

  • You would pay the employee their relevant daily pay or average daily pay (if applicable). The employee would not be entitled to time and a half or an alternative holiday
  • You would not deduct any sick or bereavement leave.

For more detail you can read the public holiday information on the website.