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Ask a specialist… Public holidays and annual leave.
Question: “What happens when a public holiday falls when an employee is on paid annual leave? Is it just a case of ‘too bad’ for the employee’s annual leave balance?”
As with a lot of questions in this space, the answer is… it depends!
As is often the case during the festive period, many employees will take some time off. There is also numerous public holidays which fall during the festive period (eg Christmas Day and Boxing Day). How these two topics interact can be a challenge for employers and can make it difficult for employers to know who to pay, what to pay them and how many days to deduct from employees’ annual leave balances.
When a public holiday falls during an employee’s period of leave, whether they are entitled to be paid for that public holiday depends on whether they are on paid or unpaid leave.
If they are on a period of paid annual leave, the employee is entitled to be paid for the public holiday. The public holiday does not count as paid annual leave and should not be deducted from the employee’s annual leave balance. Employees who would normally work on the day a public holiday falls need to be paid their base rate of pay for the hours they would have worked had they not been away because of the public holiday.
Kelly works full-time and has arranged to take a period of six days of paid annual leave over the festive period while her office is shut down. This period includes Christmas Day, Boxing Day and New Year’s Day, all falling on days that Kelly usually works.
Kelly will be paid for all six days, though only three days will be deducted from her annual leave balance as the public holidays are days that she would normally work.
Generally speaking, if an employee is on a period of unpaid leave, they are not entitled to payment for any public holiday that falls during their unpaid leave.
If you have a general question that you would like answered by one of our specialists and included in The Bottom Line, please submit it to firstname.lastname@example.org.