What If An Employee’s Non-Working Day Falls On A Public Holiday In NZ?

Public holidays can be a pain point for small businesses - especially once you add rotating rosters, part-time arrangements, casual staff, and “usual” days that aren’t that usual.

One of the most common (and surprisingly tricky) questions we see is: what happens if there’s a public holiday on a non-working day? In other words, the public holiday falls on a day your employee doesn’t normally work - do you still need to pay them, or give them a day off in lieu?

The good news is that New Zealand’s rules are fairly clear once you know what to look for. The key concept is whether the public holiday falls on an employee’s “otherwise working day” under the Holidays Act 2003.

Below, we’ll walk you through the rules in plain English, show common scenarios and examples, and share practical tips so you can stay compliant (and keep your payroll clean and defensible).

What’s The General Rule For A Public Holiday On A Non-Working Day?

If a public holiday falls on a day the employee would not otherwise have worked, you generally:

• do not have to pay them for that public holiday, and
• do not have to give them an alternative holiday (a day in lieu).

So, if your employee truly wasn’t due to work that day, and it wasn’t an “otherwise working day”, there’s usually no extra entitlement triggered.

But (and it’s a big “but”) it’s not always as simple as “they weren’t rostered that day”. The legal test isn’t just the roster - it’s whether the day is an otherwise working day.

This matters because if the day is an otherwise working day, then the public holiday entitlement can apply even if they were on leave or not rostered due to a roster cycle.

What Does “Otherwise Working Day” Mean Under The Holidays Act?

“Otherwise working day” is the heart of the public holiday rules in NZ.

In practical terms, a day is an employee’s otherwise working day if they would normally have worked that day, if it wasn’t for:

• the public holiday, or
• the employee being on leave, or
• a rostered day off that’s part of a pattern, or
• some other arrangement that means they’re not actually working this time.

To work out whether it’s an otherwise working day, employers typically look at factors like:

• The employee’s employment agreement and expected work pattern
• How the roster usually works (especially if it rotates)
• What’s happened in practice over time (the “real world” pattern)
• Whether the employee would have worked if the public holiday didn’t exist

This is one reason it’s worth having clear documentation from day one - including a well-drafted Employment Contract that sets out hours, days of work, and how rosters are handled.

Why it matters: If you treat a day as “non-working” when it is actually an otherwise working day, you risk underpaying entitlements - which can lead to backpay claims and compliance issues.

Rosters And Rotating Work Patterns: Where Employers Get Caught Out

Many small businesses (hospitality, retail, healthcare, trades) use rosters that rotate weekly. That’s where the “non-working day” question becomes less straightforward.

For example:

• An employee works Monday to Thursday one week, then Tuesday to Friday the next.
• Waitangi Day falls on a Monday.
• This week, the employee isn’t rostered Monday.

Is Monday a “non-working day”? Maybe. But if, over the roster cycle, the employee often works Mondays and would have worked Monday in the normal rotation, it could still be considered an otherwise working day depending on the facts.

That’s why it’s important to assess the employee’s work pattern rather than relying on one week’s roster in isolation.

Common Scenarios: Do You Have To Pay If The Public Holiday Is On A Non-Working Day?

Let’s make this concrete. Here are some common scenarios small NZ employers run into and how the rules usually apply.

Scenario 1: The Employee Never Works That Day

Example: Your admin assistant works Monday to Thursday every week. A public holiday falls on Saturday.

Typical outcome: Saturday is not an otherwise working day, so you generally:

• don’t pay the public holiday, and
• don’t provide an alternative holiday.

Scenario 2: Part-Time Employee With Fixed Days

Example: Your part-time employee works Tuesday and Wednesday only. Labour Day (Monday) comes up.

Typical outcome: If they never work Mondays and there’s no expectation they would have worked that Monday, then no public holiday payment is usually required.

Scenario 3: Rotating Roster / Irregular Pattern

Example: Your retail employee works 4 days on / 2 days off, and the days shift across the week. This time, the public holiday lands on their rostered day off.

Typical outcome: You need to check whether that day is an otherwise working day. Because their pattern rotates, it may be an otherwise working day depending on the roster cycle and the employee’s typical schedule.

If you’re unsure, it’s better to slow down and document your reasoning. Getting advice early can save you a messy dispute later - especially if your payroll system isn’t set up to handle these edge cases.

Scenario 4: Employee Takes Annual Leave And A Public Holiday Falls During It

Example: Your employee takes annual leave Monday to Friday. Wednesday is a public holiday. Wednesday is a day they would normally have worked.

Typical outcome: The public holiday should usually be treated as a public holiday (not annual leave) if it falls on an otherwise working day. That means you generally pay the public holiday and don’t deduct annual leave for that day.

This is also where business owners sometimes ask whether they can direct employees to use annual leave to “cover” public holidays. That area needs careful handling - if you’re considering it, it’s worth reviewing the rules around annual leave directions so you don’t accidentally breach the Holidays Act or the employment agreement.

If They Work On The Public Holiday, What Do You Owe Them?

Sometimes the public holiday lands on what would normally be a non-working day - but you ask the employee to work anyway (or they volunteer and you agree).

If an employee works on a public holiday, employers usually need to pay:

• at least time-and-a-half for the hours worked (their “relevant daily pay” or “average daily pay” calculation applies depending on the circumstances).

Whether you also need to provide an alternative holiday (a paid day off later) depends on whether the public holiday falls on a day that is an otherwise working day for that employee.

If you’re running a business where overtime, penalties, or odd-hour shifts are common, it helps to keep your approach consistent and clearly documented in your contracts and policies. A well-set-up Workplace Policy can reduce confusion around rosters, payroll processing, and how you approve time off.

It’s also worth sense-checking how public holiday work interacts with overtime rates, minimum pay obligations, and your payroll practices more generally. If your team frequently does extra hours, you may want to review your approach against the guidance in this working overtime overview.

Can You “Move” A Public Holiday If It Falls On A Non-Working Day?

There are two separate ideas people often mix up here:

• “Mondayisation” (where certain public holidays are observed on Monday/Tuesday if they fall on a weekend), and
• Transferring a public holiday (where an employer and employee agree to shift the day of observance to another date).

Mondayisation: The Public Holiday Might Already Be Observed On A Different Day

Some NZ public holidays are “Mondayised” - meaning if they fall on a Saturday or Sunday, the public holiday is observed on the following Monday (or Tuesday), depending on the holiday and the rules.

However, Mondayisation is applied based on the individual employee’s working pattern (not just what day the calendar says the holiday “falls on”). That means two employees in the same business can sometimes observe the same holiday on different days, depending on which days they would otherwise have worked.

This can affect whether the public holiday lands on a working day for your employee. For example, if a holiday is observed Monday and Monday is a usual working day, then it may become an otherwise working day for them.

As an employer, you’ll want to ensure:

• your rostering reflects the observed day correctly, and
• your payroll system applies public holiday entitlements based on the observed day and the employee’s otherwise working day pattern.

Transferring A Public Holiday: Possible, But You Need To Do It Properly

In some situations, employers and employees can agree to transfer the observance of a public holiday to another working day (for example, shifting it to a day the business is closed anyway, or aligning with roster cycles).

This isn’t something you want to do casually or informally. A transfer generally needs to be genuinely agreed and recorded in writing, and it must meet the Holidays Act requirements (including that the alternative date is a day that would otherwise be a working day for the employee).

For small businesses, this is often best handled through clear contract clauses and consistent rostering processes - again, your Employment Contract is a great place to start, and you can build supporting internal processes around it.

Practical Steps For Employers: How To Handle A Public Holiday On A Non-Working Day

If you want to handle a public holiday that falls on a day the employee isn’t rostered to work smoothly (and minimise disputes), it helps to have a repeatable process.

1) Confirm The Employee’s Work Pattern In Writing

If your employee has fixed days, this is straightforward. If their hours vary, you should still document the expected pattern and how rosters are set.

Make sure you’re clear on:

• their agreed days/hours (even if flexible)
• how far in advance rosters are issued
• whether certain days are typically worked over the roster cycle

If you’re changing work patterns (for example, reducing shifts in a quieter season), remember that changes to hours can create flow-on effects for leave and public holiday entitlements - and changes need to be managed carefully. If you’re in that situation, you may want to check your approach to reducing staff hours so you don’t accidentally create an employment relations issue while trying to solve a rostering problem.

2) Decide Whether The Day Is An Otherwise Working Day (And Record Why)

When the work pattern is irregular, don’t rely on instinct. Instead, document what you considered (for example, past rosters, the rotating cycle, what the employee typically works, and any agreement terms).

This is helpful because if there’s ever a dispute, you can show you made a reasonable decision based on evidence - not guesswork.

3) Pay The Correct Public Holiday Entitlement (If It Applies)

If it’s an otherwise working day and the employee doesn’t work the day, you’ll generally pay their relevant daily pay (or average daily pay where applicable).

If it’s not an otherwise working day, you generally won’t pay anything extra for that day.

Where employers slip up is when they:

• pay nothing even though it was an otherwise working day, or
• pay something “to be safe” but do it inconsistently (which can create expectations or arguments about custom and practice).

Consistency matters - and so does making sure your payroll settings match your legal obligations.

4) If The Employee Works The Holiday, Track Alternative Holidays Properly

If the employee works on a public holiday, you must pay time-and-a-half for the hours worked. If the day is also an otherwise working day for them, they will usually be entitled to an alternative holiday as well - so make sure you track:

• the date the alternative holiday was earned
• when it is taken
• how it is paid (again, relevant daily pay / average daily pay rules can apply)

Some employers treat alternative holidays like “TOIL” (time off in lieu), but they aren’t exactly the same thing. If you offer TOIL arrangements, make sure you separate those concepts clearly and document them properly - this time off in lieu overview can help you sanity-check what your policy should cover.

5) Build A Simple “Public Holiday Checklist” Into Your Payroll Workflow

Even a basic checklist can prevent most errors. For each public holiday, ask:

• Is the business open?
• Is the employee working?
• If not working, is it still an otherwise working day?
• If working, have we applied time-and-a-half and (where applicable) recorded an alternative holiday?

If you have multiple managers rostering staff, it’s worth making this checklist part of your standard operating procedures so payroll isn’t left trying to “figure it out later”.

Key Takeaways

• If a public holiday falls on a day an employee doesn’t usually work, you generally don’t need to pay the employee or provide an alternative holiday - unless the day is an otherwise working day.
• Whether a day is an otherwise working day depends on the employee’s work pattern, employment agreement, rostering cycle, and what would have happened if the public holiday didn’t exist.
• Rotating rosters and irregular hours are where employers most commonly get caught out, so it’s important to assess patterns over time and record your reasoning.
• If an employee works on a public holiday, you generally need to pay time-and-a-half, and you may also need to provide an alternative holiday if the day is an otherwise working day for them.
• Clear documentation (including a tailored Employment Contract and practical policies) makes public holiday compliance significantly easier to manage.
• If you’re changing hours, rostering arrangements, or trying to transfer public holiday observance, it’s worth getting advice early so you don’t create compliance issues under the Holidays Act.

If you’d like help tightening up your employment documents or sense-checking your public holiday processes, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.