I’ve decided to close the business for the holiday weekend. Who do I pay?
This is a common question when there is a block of more than one public holiday, say over Christmas, New Year, or Easter, and an employer decides to close not only on the statutory public holidays, but also some extra days to give their employees a few days off.
As an example, over Easter we noticed some businesses choose to close on Good Friday and Easter Monday (the two public holidays over that period), but also on Easter Sunday (which is not a public holiday). Can you just tell your staff you are closing on that day and that no-one will be rostered on and leave it at that?
Not really. Let’s take this step by step.
1. Who gets paid if you decide to close on a public holiday?
An employee would get paid for the public holiday, even if they don’t work it because you are closed, if that day falls on a “normal day of work for them”. They are entitled to be paid their ‘relevant daily pay’ or ‘average daily pay’ – that’s at normal rates; you only get paid time and a half if you actually work on a public holiday.
You’ll first need to establish whether the public holidays falls on a day that the employee would typically work and our “otherwise working day” article on the pages following goes into this in more detail. Once you’ve established that it is a normal day of work for the employee in question they are entitled to paid for the public holiday. This payment is not to be taken from their annual leave entitlement. Please note, that the same rules apply for an employee who doesn’t work the public holiday if for example they have requested, and you have granted, the day off. If this day falls on a normal day of work for them, they will still be entitled to be paid.
An employee who does not normally work on the day of the week in question, and who does not work on the public holiday day, is not entitled to a payment for that day. For example, a part-time employee who never works on Friday has no entitlement to payment for Good Friday.
2. What if you decide to close an extra day and give everyone the extra day off?
If you decide to close the business for a day that you are usually open, employees who normally work on that day in question (eg, Sundays) would be entitled to be paid for the day as it is the business’ choice to close, not theirs. They had every expectation they would be working that ‘Sunday’ as they usually do!
What are your options then?
You could organise an annual closedown for the business by giving your staff at least 14 days notice and as a result direct employees to take that day off as an annual leave day, or, if they don’t have any annual leave owing, to take the day off as unpaid leave (or pay them leave in advance of their entitlement). Employers may implement one such closure per year. What if you’ve already had your annual closedown this year? If both the employer and the employee agree, employers may close their operation and discontinue the work of employees at other times, but the employer cannot require the employees to take annual holidays for a second closedown. If there are other closedowns the employer and employees will have to agree to the arrangements that will apply (often times you may find that when discussed with employees they will be happy to have the time off as annual leave days).
Any public holidays that fall over the closedown period will still be treated as public holidays however – you can’t direct employees to take a public holiday day as annual leave.