A serious case of Monday-itis
Although we may be safely out of the chaos that was 2020, the New Year has brought with it five Mondayised holidays to keep employers on their toes when calculating holiday pay. Employers will be aware that when a public holiday falls on a Saturday or Sunday, the holiday may be pushed to a weekday (Mondayised) for the purposes of holiday pay, depending when an employee normally works. The holiday will only be Mondayised for employees who do not normally work on the day the holiday falls.
‘Otherwise working day’
Where work patterns or rosters are inconsistent, it can be difficult to establish whether a day is an ‘otherwise working day’. This exercise is a practical assessment of all relevant factors, such as the employment agreement, the usual work pattern and any recent rosters. The Employment New Zealand website has an ‘otherwise working day’ calculator which may assist further.
How employers should assess Mondayisation using Waitangi Day as an example
This year Waitangi Day falls on Saturday 6 February but in some cases will be Mondayised to Monday 8 February.
- If an employee normally works on a Monday and not a Saturday (the actual public holiday), Monday 8 February will be treated as the public holiday. If they work on the Monday, they will receive time and a half and a day in lieu, whereas if they do not work, they will be paid their relevant or average daily pay (see below).
- If an employee normally works on a Saturday and not a Monday, the Saturday will be recognised as the public holiday. If they work on the Saturday, they will receive time and a half and a day in lieu, whereas if they do not work they will still be paid for that day.
- If an employee normally works both Saturday and Monday, the holiday is not Mondayised. If they do in fact work these days, they will receive time and a half and a day in lieu for the Saturday, and will be paid as normal for the Monday.
- If an employee does not normally work Saturday or Monday, the holiday is not Mondayised. If they do work the Saturday they will receive time and a half, but not a day in lieu.
If you did not consider these rules for the day after New Year’s Day (which fell on a Saturday), it may be worth reviewing payments made surrounding that day to ensure compliance. These rules will also apply on Anzac Day, Christmas Day and Boxing Day, which all fall on weekend days this year.
Rate of pay for public holidays
With the complication of Mondayisation, as well as a number of regional anniversary dates approaching, employers should also ensure they understand how to calculate an employee’s pay surrounding public holidays.
If an employee’s relevant daily pay (RDP) can be calculated, this should be used to make payment for public holidays. RDP essentially means paying an employee what they would have earned if they had worked on the day – remember that this includes any regular allowances, commissions, bonuses, and overtime pay that the employee would have received on the day.
If RDP cannot be calculated, for example because the employee’s daily pay varies in the relevant pay period, you may use average daily pay (ADP). This is calculated by dividing the employee’s gross earnings over the past 52 weeks by the number of days they worked (or was on paid leave/holidays) in that period.
The Holidays Act is complex, with strict rules and calculations for different types of leave. We recommend you audit your payroll system and obtain legal advice to ensure you are paying holiday pay correctly.
If you would like to discuss any of these points in more detail, and what they mean for your business, please contact a member of our specialist employment law team.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.