You are Entitled to be Paid for Public Holidays that Fall After the End of Your Employment

Are you aware of your public holiday entitlements under the Holidays Act 2003?

Knowing the law is crucial to understanding your entitlements as an employee. Section 40(3) outlines some of these in relation to public holiday pay here in New Zealand.

 

40          Relationship between annual holidays and public holidays

(3)          The employee is entitled to be paid for a public holiday if the holiday would have—

(a)          otherwise been a working day for the employee; and

(b)          occurred during the employee’s annual holidays had the employee taken his or her remaining annual holidays entitlement immediately after the date on which the employee’s employment came to an end.

 

S40(3)(a)

S40(3)(a) is very well known – this is the section which entitles you to a paid day off for public holidays if it would otherwise have been a working day.

You are entitled to be paid for any public holiday you would have worked had it not been a public holiday.

For example, Mondays are an ordinary working day for you and Anzac Day falls on Monday. You get the day off but are still entitled to payment for that day.

 

S40(3)(b)

S40(3)(b) is less well known – it entitles employees to be paid for public holidays, even after their employment has come to an end.

Employees are entitled to be paid for all public holidays that fall within the period following their last day of work, had they taken all of their accrued annual leave entitlement.

 

This is easier to understand with an example:

• You hand in your registration on 24 November 2023.
• Your notice period is 4 weeks. You work 4 weeks, and then your employment comes to an end on 22 December 2023.
• You have accrued 4 weeks of annual leave which you have not taken.

You are entitled to be paid:

1. Your accrued annual leave on termination (as normal); and
2. separately, for all public holidays that fall within 4 weeks of your last day of employment (because you had 4 weeks of accrued annual leave which you had not taken). In this case, Christmas Day, Boxing Day, and 1 and 2 January.

 

Takeaways:

Employers need to be aware of and comply with these provisions to ensure they are fulfilling their obligations to their employees under the law – in our experience, this is not something which is widely known or is always calculated automatically by payroll software.

Employees need to be aware of this entitlement to ensure, when leaving employment, their final pay is being calculated correctly. They need to be aware of how much accrued annual leave is owing (which is not always shown on payslips – the amount of leave on payslips is usually an estimate which gradually increases throughout the year, rather than an accurate entitlement figure).

 

If you are an employee and believe your final pay has been paid incorrectly, or you are an employer and concerned you may not be complying with these legal requirements – please reach out to the team here at Watermark Employment Law and we can assist you.