As we approach the end of the year, now is the time to ensure your business meets its legal obligations around Christmas and New Year closedowns. Under the Holidays Act 2003, employers can have one annual closedown period for all or part of their business, but there are specific notice and leave requirements you must follow.

Generally speaking, unless you have an alternative binding agreement, you can only enforce annual leave once per year per employee.  Here are the important things you need to know now.

You must give your employees at least 14 days’ written notice of the closedown period. This should clearly state:

  • The start and end dates of the closedown period; and

  • Which parts of the business will be closed (if not all).

We recommend providing this notice as early as possible, ideally by mid-November at the latest to allow staff time to plan and to manage any leave-balance discussions well before the holiday period.

If Employees Don’t Have Enough Annual Leave

Employees who do not have sufficient annual leave to cover the closedown period have two options:

  1. Take unpaid leave for the balance of the period; or

  2. Take leave in advance, by agreement with you.

If an employee has not yet become entitled to annual holidays (for example, they’ve worked for you less than 12 months), you must:

  • Pay them 8% of their gross earnings as at the start of the closedown; and

  • Treat the closedown as resetting their leave entitlement date (“anniversary date”).

Requiring Employees to Work Over the Statutory Holidays

If your business operates over the Christmas and New Year period, and you require employees to work on public holidays, you must:

  • Ensure the requirement to work public holidays is clearly stated in their employment agreement;

  • Pay employees at least time and a half for all hours worked on a public holiday; and

  • Provide an alternative holiday (day in lieu) if the public holiday would otherwise have been a normal working day for that employee.

Key Public Holidays This Year

  • Christmas Day – Wednesday 25 December

  • Boxing Day – Thursday 26 December

  • New Year’s Day – Wednesday 1 January

  • Day After New Year’s Day – Thursday 2 January

If you’d like a compliant closedown notice template or a quick audit of your employment agreements to ensure they meet these requirements, get in touch with the PeopleHQ team — we’re here to help you get it right before the Christmas rush.  Reach out to info@peoplehq.nz or call us on 07 393 2424.