Employee obligations and entitlements on public holidays

Public holidays are often frantic for hospitality venues. Locals might be seeking coffee closer to home – so the morning rush might be busy – and customers who are off work may be looking to start or end the day with a great dining experience.


Employees are the backbone of any venue. It’s absolutely critical that employee obligations and entitlements are met, and workers are satisfied during these shifts. Among other potential consequences, venues may face the challenge of staff turnover if they are not met.


This article covers some of the staff obligations and entitlements, and discusses how businesses may be able to meet them.


Do staff have to work?


Whether employees have to work on public holidays will depend on their employment agreements. Many agreements contain clauses which provide that the employee agrees to work on public holidays when required by the employer. 


If no such clause exists, employers can request that staff work on these days – staff are under no obligation to accept, and can simply refuse.


Increased wages, and how to cover it


The Holidays Act 2003 provides for employees to receive a higher rate than their usual wage for working on public holidays. All employees who work on a public holiday are paid “time and a half” (their normal hourly rate plus half of that rate again).


They must also receive a full day’s “alternative holiday” (often referred to as a ‘day in lieu’) if the employee would normally work on that particular day.


To cover costs, an option for venues to consider is a price increase/surcharge on public holidays – for example, a 10 per cent price increase for coffees and meals – and being upfront with customers that the additional cost is helping to cover wages. Customers may be willing to pay $4.50 instead of $4 for a latte because they still need their coffee hit, competitors may be closed and they want to support the hospitality team they have developed a strong rapport with.


Entitlements to be considered


Employees who work on public holidays are entitled to time and a half and possibly an alternative day’s holiday, as outlined above.


Employees who do not work on public holidays must be paid at the rate of their Relevant Daily Pay, meaning what the employee would have earned if they had worked on the day. 


If, for whatever reason, calculating an employee’s Relevant Daily Pay is impracticable, employers can utilise an alternative calculation, Average Daily Pay, which is a daily average of the employee’s gross earnings over the past 52 weeks.


Government agency websites are important resources in outlining employee obligations and entitlements on public holidays. For instance, if you are trying to work out whether an employee is entitled to an alternative holiday, and cannot determine if the day in question would be an ‘otherwise working day’ for them, Employment New Zealand has an Otherwise Working Day calculator tool. If in doubt, you should seek legal advice.


Communicating about public holiday pay entitlements with staff and considering additional incentives may prove to be particularly important, as they are key to a venue’s productivity, and retaining great employees will likely be an asset for your venue moving forward.

Disclaimer: This guide is general in nature and does not take into account your individual circumstances. Before acting on any information, you should consider whether this is right for your business.