Alternative holidays (days in lieu)
An alternative holiday is a day an employee is entitled to take off as paid leave in return for having worked on a public holiday. Employees are only entitled to an alternative holiday if the public holiday they worked fell on a day they would normally have worked. For example, if your employee regularly works on Mondays, and they work through a public holiday on a Monday, then they are are entitled to a paid day off to take later. They are also entitled to time and a half pay on that Monday.
If your employee works a public holiday and it's a day they would not otherwise work, then they are not entitled to an alternative holiday. They are still entitled to time-and-a-half pay. For example, if your employee always has Mondays off, but chooses to work through a public holiday on a Monday, then they are not entitled to an alternative holiday.
When your employees work on a public holiday, you must pay them for that day using the public holiday worked method. This lets Ace Payroll keep track of the number of alternative holidays they are owed.
When do employees get an alternative holiday?
If your employee is entitled to an alternative holiday, they are entitled to one full day off with one full day of regular pay, even if they did not work a full day on the public holiday. This is to ensure that all employees are still legally entitled to eleven full public holidays a year, in accordance with section 43 of the Holidays Act 2003.
For example, if your employee only worked for three hours on the public holiday, they are still entitled to one full paid day off later paid at their regular daily rate.
If twelve months pass and your employee has not taken the alternative holiday, they may request to exchange the holiday for payment, as set out in section 61 of the Holidays Act 2003.
The rules for Alternative holidays are set out in sections 56 to 61 of the Holidays Act 2003 .
Paying alternative holidays
When you pay alternative holidays, you'll need to use the Leave Calendar.
Payment for alternative holidays is based on the relevant daily pay of the employee for the day on which the alternative holiday is taken. Ace Payroll calculates this for you automatically when there is enough information in the employee's file.
Relevant daily pay is explained in section 9 of the Holidays Act 2003.
When your employee uses their alternative holiday to take a day off, this is called an Alternative Holiday Taken.
When your employee does not take a day off but requests to be paid for the day they are owed, this is called an Alternative Holiday Sold.