Public holidays are minimum employment entitlements under the Holidays Act 2003 (‘the Act’) and remain a significant source of compliance risk for employers. Errors most commonly arise around determining whether a public holiday is an employee’s ‘otherwise working day’, calculating pay correctly, and applying alternative holiday entitlements.
How Many Public Holidays Are There?
Employees are entitled to a paid public holiday if the day would ‘otherwise be a working day’ for them. The 12 public holidays are:
Christmas Day.
Boxing Day.
New Year’s Day.
2 January.
Waitangi Day.
ANZAC Day.
Good Friday.
Easter Monday.
King’s Birthday.
Matariki.
Labour Day.
One regional anniversary day*, being the day of the anniversary of a province or the day locally observed as that day.
Public holiday entitlements apply to all employees, including full-time, part-time, fixed-term, and casual employees.
Entitlements depend on whether the public holiday in question is an ‘otherwise working day’ for the employee, and whether they work on the public holiday, or not.
Determining the Otherwise Working Day Rule
A public holiday is paid only if it falls on a day that is ‘otherwise a working day’ for the employee.
When assessing this, employers must consider:
The employee’s employment agreement.
Work patterns and rosters.
Whether the employee regularly works that day.
Any recent changes to working arrangements.
A narrow or overly technical approach to this assessment can create legal risk and employers often encounter disputes in relation to this issue.
A helpful approach for determining whether a public holiday is an ‘otherwise working day’ is to ask the question: But for the public holiday arising, would the employee have worked, yes, or no? That said, sometimes the question isn’t clear cut, and an employer must consider relevant factors prescribed by law such as the employee’s work patterns to determine this issue.
Payment and Entitlement Obligations
When an employee does not work?
If the public holiday falls on an ‘otherwise working day’ and the employee does not work, the employer must pay the employee:
Relevant Daily Pay (‘RDP’), or
Average Daily Pay (‘ADP’) where relevant daily pay cannot be determined.
When an employee works?
If an employee works on a public holiday that is an ‘otherwise working day’:
They must be paid time and a half for the hours worked, and
They are entitled to a paid alternative holiday (day in lieu).
If the public holiday is not an ‘otherwise working day’, pay for time and a half applies for any hours an employee works on a public holiday, but no alternative holiday entitlement arises.
In some circumstances, an employer may also be required to top-up the employee’s pay for a public holiday. This typically applies in situations where the employer requires an employee to work less hours than normal. The employee’s employment agreement becomes relevant because if there is a contractual obligation to pay the employee a certain number of hours on the day in question, then that remains legally binding on the employer. This is an issue that is not well-understood by employers and frequently a cause of disagreement, but contractual obligations will still apply.
Payment Calculations
Public holiday pay must reflect what the employee would have earned had they worked that day. This includes:
Regular allowances.
Productivity or incentive payments.
Commission, where applicable.
Strict reimbursement allowances are excluded.
Payroll systems defaulting to other pay approaches instead of applying RDP or ADP rules can sometimes cause compliance problems for employers.
Special Transfer Rules
The Act prescribes special rules regarding the transfer of the following public holidays:
Public holidays that fall during Christmas and New Year.
Waitangi Day and ANZAC Day.
If any of these public holidays fall on a weekend, then they transfer to the following Monday (or in some cases Tuesday), if they are not ‘otherwise working days’ for an employee.
The effect of these special transfer rules means that employees who typically work Monday to Friday do not miss out on these public holidays. This rule is often referred to an ‘Mondayisation’ and can involve difficulty for employers to manage correctly. The relevant rules are set out under sections 45 and 45A of the Act.
For employees that work on the weekend during these circumstances, any public holidays will be observed for those employees when they fall and not transferred. The rules make it clear an employee is not entitled to ‘double dip’ in situations where the special transfer rules apply.
Special Payment Rule Where an Employee is Sick or Injured on a Public Holiday
Under section 61A of the Act, an employee that is scheduled to work on a public holiday but cannot be due to sickness or injury, then the day must continue to be treated as a public holiday, not as sick leave.
This rule also applies to the same situation but involving bereavement, or family violence leave. In either case, where this applies, then public holidays must be recognised, preserving the employee’s entitlement to paid sick leave, and other forms of leave entitlement.
Special Payment Rule Post-Termination
Under section 40 of the Act, an employer may still be required to pay a public holiday after employment has ended.
This rule applies where an employee has annual leave entitlement, that is annual leave that arises after 12-months of continuous employment.
Where this applies, the employer is required to count forward, or project the employee’s annual leave although they had taken it following termination, if any public holidays fall during that period that are ‘otherwise working days’, the employer is also required to recognise and pay those public holidays.
Other Rules About Public Holidays
There are a range of other rules relating to public holidays, such as:
Having compliant wording about corresponding entitlements in stated in employment agreements,
The provision and cash-out of alternative holidays (where an employee works on a public holiday).
The ability to transfer public holidays (by agreement) to other days, etc.
Employers should contact Employer Pro for further information regarding issues concerning compliance and public holiday entitlements.
Case Law Snapshot – What Cases Tell Employers?
Veale v Jetstar Airways Limited [2024] NZERA 629
Whether an employee was entitled to an alternative holiday after voluntarily working on a public holiday that fell on a day that he argued was an ‘otherwise working day’ under the Actand his collective employment agreement (‘CEA’).
Mr Veale, a pilot, was rostered off on 6 February 2023 (Waitangi Day) and was on annual leave the day before. Jetstar asked him to work on the public holiday; he agreed and flew duties across both days. Jetstar did not provide an alternative holiday, contending that because he was not rostered to work on the public holiday day itself, he was not entitled to one.
The Authority’s Findings:
Clause 10.3.3 of the CEA defined an ‘otherwise working day’ for pilots as a day on which they are rostered to work. Under the agreement, once Mr Veale agreed to work, he was effectively ‘rostered to work’ on the public holiday.
Section 12 and section 56 of the Act confirmed that an employee who works on a public holiday that is an ‘otherwise working day’ is entitled to an alternative holiday.
The Authority found that Jetstar breached both the CEA and the Holidays Act by failing to provide the alternative holiday
Employer Takeaway: Even if an employee is not originally rostered to work on a public holiday, if they voluntarily agree to work and thus become rostered to work that day, they may be entitled to an alternative day off under both the Act and applicable employment agreement. Employers must carefully interpret rostering provisions and ensure compliance when employees work on public holidays, including carefully checking any contractual obligations under an employee’s employment agreement.
Wendco (NZ) Limited v Labour Inspector of MBIE [2017] NZERA Christchurch 199
The core issue in this case was how to determine whether a public holiday was an ‘otherwise working day’ for variable-rostering employees, which affects entitlements to alternative holidays when those employees work on public holidays under the Act.
Wendco (NZ) Ltd, which operated Wendy’s fast-food restaurants, used a “three-week rule” to assess entitlements. Under that rule, an employee was only treated as normally working on the same weekday as a public holiday if they had worked that day in each of the preceding three weeks.
The Authority’s Findings:
The three-week rule was an unlawful method for determining whether a day would otherwise be a working day for an employee.
The Act requires a genuine, individualised assessment under section 12 of the Act, taking into account all relevant factors (e.g., employment agreement, work patterns, rosters, reasonable expectations), rather than a fixed formulaic rule.
A relevant period for assessing work patterns is typically at least three months, and up to six months, rather than just three weeks.
Wendco was required to credit employees with alternative holidays where they had worked on public holidays that would otherwise have been working days under a proper assessment of their individual work patterns.
Employer Takeaway: Employers with variable rosters cannot rely on simplistic roster rules (such as “worked the same weekday in the last three weeks” to decide whether a public holiday is an otherwise working day. Instead, they must look at an individual employee’s actual work pattern over a reasonable period and consider all statutory factors under section 12 of the Act.
Key Risk Areas for Employers
Incorrectly determining whether a public holiday is an otherwise working day.
Failing to pay time and a half when required.
Not providing an alternative holiday where one arises.
Incorrect calculation of public holiday pay.
Tips for Managing Public Holidays
Audit payroll systems for correct public holiday calculations.
Document otherwise working day assessments, particularly for variable work patterns.
Train managers and payroll staff on time‑and‑a‑half and alternative holiday rules.
Use written agreements for any public holiday transfers.
Review employment agreements for compliant clauses.
Handled correctly, public holidays can be managed with minimal disruption. Errors, however, can result in liabilities, penalties, non-compliance and significant remediation costs.
Employer Takeaway
Public holiday entitlements under the Act can involve technical considerations and are closely scrutinised. Employers who apply a structured, consistent, and well-documented approach to otherwise working day assessments and pay calculations are best placed to minimise compliance risk and avoid costly disputes.
Compliance Warning
Public holiday entitlements are statutory minimum rights, not discretionary benefits. Errors in applying public holiday rules frequently result in significant underpayment liability, penalties, and large-scale remediation exercises.
Key compliance risks include:
Incorrectly determining whether a public holiday is an otherwise working day.
Failing to pay time and a half for work performed on a public holiday.
Not providing an alternative holiday where one arises.
Incorrect pay calculations, particularly for employees with variable hours or allowances.
This article is provided for general information only and does not replace professional advice. Employers should seek advice specific to their circumstances from Employer Pro if in doubt on their legal obligations associated with managing public holiday entitlements. Employer Pro has a range of employer focused resources and services available through our competitive Employer Protection Packages.
Employer Pro Limited – Empowering Employers Through Effective People Solutions
