It is likely that the public holidays will fall within New Zealand’s Alert 4 COVID-19 lockdown period, which means employers are beginning to ask questions about how they will pay their employees’ wages when they are receiving the government subsidies as well as beginning to face potential hardship. As employers’ obligations are not limited to just public holidays, we have answered some of these questions, and more, below:
For public holidays, notably Good Friday and Easter Monday, is it ok that I still endeavour to pay up to 80% of employees’ wages? Does it matter if there’s a public holiday included?
At this stage, there has been no change to the employer’s Holiday Act obligations, so the existing legal obligations apply – i.e. if an employee does not work on a day they would normally work, (e.g. Good Friday on the 10 April 2020), they must be paid the wages they would have received had they worked for the day.
However, we may see some legislative changes with the public holidays in April 2020. If anything changes, we will update you.
Note: there are 3 upcoming public holidays in April:
- Good Friday: Friday 10 April 2020
- Easter Monday: Monday 13 April 2020
- ANZAC Day: Saturday 25 April 2020 – Mondayized to April 27 2020
These public holidays will all fall during the lockdown period so make sure you are aware of your obligations for these days.
What if I require my worker to work on a public holiday but I cannot afford to pay them time-and-a-half due to COVID-19?
Again, if the Holiday Act specifies that there is a legal obligation on employers to pay the employee time-and-a-half for all hours worked on a public holiday, you cannot contract out of the law.
If you cannot afford to pay time and a half, you will need to enter into a discussion with your employee to reach an agreement on a reduced hourly rate [that rate cannot be less than minimum wage]. If you cannot reach agreement, you cannot refuse to pay time and a half for work on a public holiday and you will need to take advice regarding your options to operate.
My employee has asked to take bereavement leave. Can I just try to pay the 80% of the wage or pass on the government subsidy?
Bereavement leave is paid with the same calculation as public holidays – employees must be paid the wages they would have received had they worked for the day. This is a statutory obligation and the employer and employee cannot agree to to go outside the law. The Government may make some amendments to recognise that the current circumstances are clearly not normal, but this is yet to occur.
This means that if the employee and employer have agreed that there is a change to wages, whether it is being paid at 80% of their usual remuneration or paid a reduced hourly rate, then relevant daily pay will be calculated on that figure. E.g. if an employee earning $100 per day and then agreed to be earning $80 per day, $80 a day would be the employee’s relevant daily pay and the amount they would have received if they had worked on the day that was taken as bereavement leave.
If the employer has tried its best to pay 80% but is unable to do so, and are only passing on the subsidy to the employee, the employer must record the bereavement day and ensure the amount is recorded at relevant daily pay, the balance of the subsidy then becomes wages.
If you are still confused about employer obligations for Bereavement, Alternate and Public Holidays, please see below:
Payment for a Public Holiday:
- If an employee does not work on a public holiday, and that day was a day they would have worked but for it being a public holiday, they must be paid what they would have received had they worked.
- If you are an essential service and an employee is working on the public holiday:
- The employee will be entitled to the greater of:
- The portion of the employee’s relevant daily pay or average daily pay (less defined “penal rates”) that relates to the time actually worked on that day plus half that amount again; or
- The portion of the employee’s relevant daily pay that relates to the time actually worked on the day (which includes all penal and other rates).
- The employee will be entitled to the greater of:
Alternative Holiday
- If an employee works on a public holiday in accordance with their employment agreement and the day would otherwise be a working day then they are entitled to an alternative holiday.
- If an employee works for an employer only on a public holiday then they are not entitled to the alternative holiday.
Sick, Bereavement and Alternative Leave
An employee must receive their daily pay or average daily pay for each day that is taken as sick leave, bereavement or alternative leave.
