There are four public holidays over the Christmas/New Year period – Christmas Day, Boxing Day, New Year’s Day and the second of January. Payment for public holidays is at relevant daily pay (RDP) or average daily pay (ADP).
Relevant daily pay is what the employee would have earned if they had worked the day. Where this isn’t possible or practicable to calculate, employers can use the average daily pay (ADP) calculation which is an averaging calculation over the previous 52 weeks using the number of days worked or on leave (which is where it differs from annual leave calculations).
While the Holidays Act now gives employers the ability to pay at ADP it is important that you always comply with your employment agreements – if your employment agreements provide payment is at RDP only, then this is what you must pay. This is a good example of why it is important to regularly review your agreements, so give us a call if you would like to discuss this further.
If an employee works a public holiday they are entitled to be paid at time and a half of their RDP or ADP for the hours they work, plus their normal rate for any additional hours they would normally work but didn’t because it was a holiday. For example, if a store would usually be open from 9am to 9pm on a Wednesday and the employee would normally work a 12-hour day but only works 10 – 4 on Christmas Day, they are entitled to payment for six hours (time worked) at time and a half, and six hours (normal hours not worked) at RDP or ADP.
Payment if an employee doesn’t work the public holiday
If an employee didn’t work the day but it is a day they would have been at work if it hadn’t been a public holiday (an “otherwise working day”) then they are entitled to payment. Sometimes it can be difficult for employers to decide what constitutes an otherwise working day. For example, work may only be available if the weather was fine, in which case you need to wait until the day to know if they would have worked or not.
Alternative holidays
If an employee works a public holiday which is an ordinary or ‘otherwise’ working day for them, they are also entitled to an alternative holiday. These used to be called a “day in lieu” under the previous Holidays Act. The payment for an alternative holiday is at the rate that applies on the day it is taken.. That means an employee can work five hours on a public holiday and take their alternative holiday on a day they would normally work 12 hours, so would be paid for 12 hours on the day the alternative holiday is taken. Again, alternative holidays are paid at RDP or ADP. The following sets out entitlements to payments and alternative holidays.
Otherwise working day
Worked the public holiday
- Paid time and a half of RDP or ADP for time worked. Balance of normal hours at normal rate.
- Receive an alternative holiday.
Don’t work the public holiday
- Paid normal hours at RDP or ADP. No alternative holiday.
Not an otherwise working day
Worked the public holiday
- Paid time and a half of RDP or ADP for time worked. Balance of normal hours at normal rate.
- No alternative holiday.
Don’t work the public holiday
- No entitlement.
Please call our team if you have any questions about your obligations for public holidays.