The holiday season is a time to unwind. But, if you’re a small business owner, it can bring a level of stress as many New Zealand businesses go into hibernation over Christmas and New Year.
Whether you’re open for business or not, what can, and can’t you legally do over the holiday season? We spoke to Jaenine Badenhorst, employment lawyer at Empower Law, to find out.
Can I insist employees use their annual leave over the holidays?
“Employers and employees should reach an agreement on when annual leave will be taken,” Badenhorst says. “However, if an agreement can’t be reached, an employer can require an employee to take annual leave at a particular time by giving them 14 days written notice.”
As an employer, you can also require an employee to take their annual leave at a particular time each year (such as over Christmas or an otherwise quiet time). This is known as a ‘closedown’ period.
“If you have a regular closedown period, this must be recorded in your employee’s employment agreement” Badenhorst says. “This allows employees to plan ahead rather than unexpectedly ending up without paid leave to cover a closedown period. An employer must also confirm the closedown dates with the employee by giving at least 14 days’ written notice.”
Can an employer require their employee to take annual leave?
If your workplace has a closedown period, employees can be required to take leave, regardless of whether they have any annual leave accrued. “In these situations, your employees can be required to take unpaid leave provided they are given at least 14 days’ written notice and their employment agreement states there will be a close-down period,” Badenhorst says. “Alternatively, you may agree to employees taking annual leave in advance or allowing an employee to work all, or some of, the closedown period (if it’s practical and safe to do so).”
Can I legally require employees to work on public holidays?
All employees are allowed a paid day off on all 12 public holidays in New Zealand. These are also known as ‘statutory holiday days’ or ‘stat days’. However, if your business operates on a public holiday on which you are allowed to trade, and you need your employees, then you can require them to work. “A requirement to work on public holidays must be recorded in the employee’s employment agreement,” says Badenhorst.
“If you want your employees to work on a public holiday, but they are not required to work under their employment agreement, you can still ask them if they would agree to work,” Badenhorst says. “The employee has a right to say no, and you cannot treat them adversely because they turned down the offer of work.”
Do I have to pay employees extra on public holidays?
When an employee works on a public holiday, they will be paid their usual wage for hours worked, plus half of their usual wage for the hours worked (often called ‘time and a half’).
“The employee is also entitled to a whole day off work on another work day, even if they only worked some of their usual hours on the public holiday,” Badenhorst says. “This is commonly known as ‘day in lieu’ and is paid at the employee’s relevant daily rate.”
If a public holiday falls on a day where the employee is already on annual leave due to the closedown period, that day doesn’t count as an annual leave day (provided it would have been a normal working day for the employee if there was no closedown).
“It can be tricky to work out exactly what an employee should be paid for a day of leave or on a public holiday, especially if they have irregular hours, or if they are on salary,” says Badenhorst. “We recommend employers make use of payroll companies to avoid getting things wrong.”
What if an employee doesn't want to work on a public holiday?
An employee who isn’t required to work on a public holiday, in their employment agreement, can decline to work,” Badenhorst says. “They will still get paid their normal wage, as if they worked that day.”
“If you want an employee to be on standby in case they’re needed on a public holiday, there must be an availability clause in the employee’s employment agreement that specifies they must be available to work on public holidays if asked,” Badenhorst says. “Without an availability clause, the employee can turn down any work offered on a public holiday.”
Employers must pay an employee for making themselves available, but the rate of pay can be less than the employee’s usual rate. The employee is entitled to their full entitlement for working on a public holiday, only if they are called on. “This can be a good option for businesses that cannot easily predict staffing needs on a public holiday,” Badenhorst says.
What happens if a public holiday falls on a weekend?
If a public holiday falls on a weekend and that day would ordinarily be a working day for the employee, that day is treated just like any other public holiday.
However, if a public holiday falls on a weekend, and the employee does not normally work on weekends, the employee’s public holiday entitlement will move to the following Monday. Badenhorst recommends employers use this flowchart to help them understand employee entitlements for public holidays.
Preparing your business for the holiday season means being aware of your legal responsibilities to your employees. Knowing what this means for your business can help to ease the stress of the season. If you’d like to learn more about staffing and shutting down over Christmas and the New Year, you can find more information here.
Information provided in this article is general only, does not constitute legal advice and should not be relied upon as such. SEEK provides no warranty as to its accuracy, reliability or completeness. Before taking any course of action related to this article you should make your own inquiries and seek independent advice (including the appropriate legal advice) on whether it is suitable for your circumstances.
