public holidays - at least time and a half payment for time worked

Under the Holidays Act, as amended in October 2004, if an employee works on any public holiday, that work now attracts a minimum payment of time and a half for the time they actually work on a public holiday. Employment agreements, however, may already provide for time and a half or better (see below)

To work out what an employee should be paid, it is necessary to compare the time and a half required by the Holidays Act 2003 (as amended in October 2004) and what the employment agreement requires. The employee is entitled to the greater of:

• their relevant daily pay less any penal rates, plus half that amount again; or
• their relevant daily pay, which includes any penal rates, under their emplyment agreement.

Penal rates are amounts payable for working on a particular day (usually a Saturday or Sunday) or on a public holiday.

Our Holidays Online Tool makes it easy to work out what pay and leave an employee is entitled to on public holidays. You can also use it to work out sick and bereavement leave entitlements. Make sure you have payroll information or a payslip handy when you use the tool.

See Calculating payment for public holidays - relevant daily pay to assist the calculation.

See examples below on how to compare a. and b. above to work out how much an employee should be paid.

This fact sheet outlines:

• the implications for employment agreements of the requirement to pay at least time and a half for work on public holidays; and
• the transitional arrangements where an employee's normal rate already includes provision for time and a half for public holidays.

The implications for employment agreements

Employment agreements must specifically provide that an employee will receive at least time and a half for working on a public holiday. This applies to all employees, including salaried employees.

Ideally employers and employees will have reviewed and agreed on amendments to employment agreements before the Holidays Act 2003 came into force on 1 April 2004 , in order to provide certainty for the employer and the employee.

If this has not occurred the agreement must be amended to state the right to time and a half at the earlier of the next re-negotiation, or within 12 months of the Act coming into force.

If, however, an employee's regular pay already includes time and a half or better, there is a longer period for amending the agreement (see "the transitional provisions for existing employment agreements" below).

New employment agreements need to specifically provide that an employee will receive at least time and a half for working on a public holiday.

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Example of required clause:

“If the employee works on a public holiday they will be paid at the rate of time and a half for hours worked as set out in section 50 of the Holidays Act 2003.”

An employment agreement cannot in future specify that the rate of pay already includes a component for time and a half (except in the transitional provision mentioned below).

Time and a half is applied to the portion of the employee's relevant daily pay, less penal rates, for the time that the employee actually works.

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Examples: what time and a half means in practice

In most cases, what time and a half means will be easy to identify. For example, if the employee is paid an hourly rate, then he or she is entitled to one-and-a-half times that rate for the time worked on a public holiday, as in the following clause:

“The pay rate for this position is $12 per hour. For time worked on a public holiday, the pay rate is $18 per hour (time and a half).”

In other cases there are a number of ways this can be done appropriately, depending on the wishes of the employer and employee. This may be a day rate, part day rate or hourly rate. The basis on which time and a half is calculated should ideally be included in the employee's employment agreement, if they are likely to work on a public holiday.

For example, if a salaried employee has regular hours of work, then the relevant daily pay can be calculated by dividing the annual salary by 52 removed “to identify ordinary weekly pay” and then by the number of days worked per week to identify the relevant daily pay.

The amount of the time and a half payment should then be based on the portion of the normal day that the employee actually works.

For example, for an employee whose salary is $40,000 per annum, and who normally works five eight-hour days per week:

• weekly pay is $769.23.
• the relevant daily pay is $153.85 (weekly pay divided by five)
• time and a half the relevant daily pay is $230.78, if the employee works 8 hours on the public holiday.

The employee would be paid for the time actually worked on the basis of this amount. For example, if the above employee work half a day, they would need to be paid $115.39 (half of $230.78).

Where it is difficult to tell what an employee's time and a half rate would be, a Labour Inspector will be available to help determine the employee's entitlement on a public holiday.

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Examples: Where an employment agreement provides for penal rates

Double time in agreement

An employee is paid $10 an hour for normal working hours. The employment agreement, however, provides for double time (an extra $10 per hour making $20 per hour in total) for working on Sundays.  Anzac Day falls on a Sunday and the employee works eight hours. Relevant daily pay will therefore be $20 X 8 = $160. 

The employee will be entitled to the greater of:

The employment agreement is better than the minimum required by the Holidays Act 2003 so the employee is entitled to $160

Time and a quarter in agreement

An employee is paid $10 an hour for normal working hours. The employment agreement, however, provides for time and a quarter for working on Saturdays (an extra $2.50 per hour making $12.50 in total). Anzac Day falls on a Saturday and the employee works eight hours on that day at the time and a quarter rate. Relevant daily pay will therefore be $12.50 x 8 = $100.

The employee is entitled to the greater of:

• relevant daily pay ($100) less any penal rates
  (the extra $2.50 x 8 = $20),
  plus half that amount again (an extra $40): 
  $100 - $20 + $40 = $120   
  OR
• relevant daily pay = $100

The employment agreement is inferior to the minimum required by the Holidays Act 2003 so the employee is entitled to $120 - the time and a quarter rate is effectively topped up to time and a half.

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The transitional provisions for existing employment agreements

Where an employee's normal rate already included provision for at least time and a half for public holidays (e.g. a composite rate) at 1 April 2004, that arrangement can stay in place:

• for individual employment agreements, until 1 April 2007
• for collective employment agreements, until the later of 1 April 2007 or when a replacement collective agreement comes in force.

This applies where the amount has been genuinely negotiated, and the amount can be shown to meet the requirement to pay at least time and a half for working on a public holiday.

If there is a dispute over whether the rate does or does not include a provision for time and a half for working on a public holiday, a Labour Inspector can determine the matter for the parties.

Note that after the transitional period expires, every employment agreement will need to specifically provide that an employee will receive time and a half for working on a public holiday. If a composite rate remains after that date, the employee will be entitled to one-and-a-half-times this rate for the time worked on the public holiday.

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This page was last updated on: 22-Apr-2010 and is current.