5 December 2023

As we approach the festive season, you may be starting to plan how your business will approach the summer holidays. If your business will close over the Christmas period, there are a few things to understand about employee leave.

Employees need at least 14 days’ notice of your planned shutdown period, so it pays to decide early exactly when your closedown period will be. We recommend emailing or texting your employees so there is a record of them getting the shutdown notice.

For employees who are entitled to annual holidays at the time of closedown:

• If provided with 14 days’ notice, employees who are entitled to annual holidays must stop work during the closedown period and take as much of their annual leave as is needed to cover the period.
  
  
• If the employee does not have enough annual leave balance to cover all closedown days then they can either take leave in advance (if you agree) or unpaid leave.

Some employees may not be entitled to annual holidays at the time of the closedown period. This could be because they have not worked for you for a full 12 months. These employees should get 8% of their gross earnings since they started for you, less any holidays they have taken in advance.  The employee’s anniversary date for annual holiday entitlement is moved to the start date of the shutdown.  The employee and employer may also agree that they take some leave in advance.

Casual employees who receive their holiday pay on a pay-as-you-go basis will not be entitled to any further holiday pay over the closedown period.

An employee can also take other types of leave over the closing period if the day would otherwise be a normal working day. Public holidays will be treated as such and the employee is entitled to take sick, bereavement, or alternative leave if appropriate.

Employment New Zealand provides a flowchart to help you figure out which rules apply to your situation. You can see it here Annual closedowns » Employment New Zealand.

If you have any queries about your closedown period and staff pay, then please get in touch with us.

The team at Koller & Hassall wish you a wonderful Christmas and a relaxing holiday season. We look forward to continuing to help you with your accounting needs in the New Year.