With about 5 weeks until Christmas, we thought it might be helpful to give you a heads-up on what you as business owners need to remember before you take a well-earned break.
Here are our top 5 frequently asked questions about leave entitlements:
- What is a closedown and what do I have to be aware of?
- Public holidays – what are employees entitled to?
- What if staff don’t have any annual leave available?
- Sick leave leading up to Christmas – can I question if it is genuine?
- Need some help?
- What is a closedown and what do I have to be aware of?
Closedown refers to instances when an employer customarily closes their business for a period of time. This usually occurs at Christmas, however, for some industries it may be at the end of a certain season. The closedown may occur across an entire workplace or for only part of the business.
The employer may implement such a closure only once a year and require employees to take annual holidays during the period of the closedown, even where this requires employees to take time off for which they are not fully reimbursed because they have not accrued enough holiday pay.
If you chose to implement a closedown, you must give your employees 14 days notice. This is a minimum. If you know well in advance when the closedown will occur, let your employees know. It is always a good idea to put these decisions in writing so there is no confusion closer to the time when the closedown period is occurring.
If you are considering having a regular closedown period, you may want to ensure that you have it included in an annual leave policy. It is not included in the standard Code of Conduct document, however, it could be included if it is going to be a regular occurrence.
- Public holidays – what are employees entitled to?
Employees are entitled to a paid day off on a public holiday if it would otherwise be a working day. Over Christmas and New Year the public holiday entitlements are: Christmas Day (25 December), Boxing Day (26 December), New Year’s Day and the day after (01 and 02 January).
Remember, an employee cannot be entitled to more than four public holidays over the Christmas and New Year period, regardless of their work pattern.
Note – if a public holiday occurs during the closedown period (as happens over the Christmas and New Year period) then the employee is entitled to paid public holidays if they would be otherwise working days for them, irrespective of how much paid annual leave they have or have not accrued.
- What if staff don’t have any annual leave available?
If you have an employee who has not been employed for 12 months up to the closedown date and they do not have an annual holiday entitlement, they should be paid 8% of their gross earnings up to the closedown date, less any leave already taken. This paid leave is then deducted from their accrued leave entitlements.
For an employee who does not have any or enough leave owing, they would need to take leave without pay or the employee may take annual leave in advance of entitlement if there is an agreement between the employer and the employee. The risk associated with this is that they may leave your employment before they have accrued the leave. It is important that you have in writing that the employer can deduct money from the employee’s final pay, if the employee has not accrued the leave before leaving the organisation. A clause covering deductions for leave taken in advance of entitlement is covered in the standard HRtoolkit employment agreements.
- Sick leave leading up to Christmas – can I question if it is genuine?
As well as employees taking annual leave for the summer break, you may see a rise in sick leave during the festive season. Work Christmas parties and end of year get-togethers with friends take their toll on staff. Remember, a hangover due to excess drinking at the work Christmas party is not genuine sick leave.
- Need some help?
Give us a call on 0800 HRtoolkit (46 86 65) and we will be happy to provide you with support and advice on closedowns or any leave issues that you may have. Annual leave information is available at Document Downloads on www.hrtoolkit.co.nz