Setting up pay conditions for a public holiday

This article is designed for implementers, and talks about general pay condition examples.

Nothing in this page should be treated as legal or employment advice, and if you have questions about correct interpretation of public holidays, these should be referred to the appropriate government agency or your employment advisor.

There are several concerns for setting up a public holiday pay rule:

Making it easy to exempt Public Holidays from overtime calculations (if appropriate)
Making it easy to include Public Holidays in overtime calculations (if appropriate)
Making it easy to handle the interaction of Public Holidays and Leave.
Allowing for Public Holidays to be corrected in cases of agreements with staff.
Making sure duplicate public holidays can’t cause problems.

Example of a very simple public holiday worked condition that would have problems.

While it can be tempting to set up a very simple version of a Public Holiday Worked as just detecting a public holiday, this will fire too often.

Example public holiday worked condition.
This is too simple, as you can’t exclude public holiday not worked from it, but also because it’s hard to work with overtime calculations.

The example above has several problems:

It doesn’t set a category before paying the category, it just pays it in 1 step.
- This is harder to maintain/edit if you need to change something
- It means you have to do your logic again later.

Example plan for public holiday handling

You should make sure you have the right worktypes & pay types configured for public holiday processing. The types required by the example build are below:

Required work types:

Required Pay Types:

Public Holiday Not Worked
- Required for system setup, and will be assigned automatically if leave is set up.
Agreed Public Holiday (Force PH)
- Optional, but recommended. Both Australia and New Zealand allow for Public Holidays to be moved by agreement with an employee. This also gives a way to handle any fringe scenario for overnight shifts or Mondayisation/Tuesdayisation.
Agreed Ordinary Day (Not a Public Holiday)
- Optional, but recommended. Both Australia and New Zealand allow for Public Holidays to be moved by agreement with an employee. This also gives a way to handle any fringe scenario for overnight shifts or Mondayisation/Tuesdayisation.
Public Holiday Worked otherwise working day (NZ only)
- Probably required for paying variable work pattern Casuals in New Zealand, as whether a public holiday would otherwise be a working day impacts employee entitlements/pay.
Public Holiday Worked not otherwise working day (NZ only)
- Probably required for paying variable work pattern Casuals in New Zealand, as whether a public holiday would otherwise be a working day impacts employee entitlements/pay.

Required Pay Types:

Exact pay types will depend on your award/employment agreement/legal jurisdiction, but the following are a recommended baseline to work from:

Public Holiday Worked
- Often this is used instead of ordinary hours. If so you would set it to the full rate to be paid.
- When used alone this will have a rate like 150% (NZ) or the rate specified by award (Often 200% or 250%)
Public Holiday Not Worked
- Required so you can clearly pay your workers for time they don’t work on public holidays.
Public Holiday Worked - Casual Rate
- Most likely only applies to Australia.
- For many awards casual rate modification could be done by adding the casual loading separately to the public holiday rate, some awards specify different rates for casuals that aren’t a straight 25% on top of base rate.
Public Holiday Worked - Overtime
- This may be required in some situations if you need to be able to pay a different rate for overtime on a public holiday, or separate overtime from penalties for compliance purposes. (As they sometimes have different tax/STP/Super treatments)
Alternative Leave Accrued
- Most likely only applies to New Zealand.
- If a day is an Otherwise Working Day, then it is likely if an employee works they are entitled to an alternative leave day.

Pay rule layout:

Classify Unpaid Leave (unpaidleave) (If adding more leave types, add them here)
Classify Paid Leave (paidleave) (If adding more leave types, add them here)
Classify Public Holiday (publicholiday)
Classify Public Holiday Not Worked (phnw)
Classify Public Holiday Worked (AU Only)
Classify Public Holiday Worked otherwise working day (phw_owd) (NZ Only)
Classify Public Holiday Worked outside usual roster (phw_nowd) (NZ Only)
Pay Public Holiday Worked (AU Only)
Pay Public Holidays Worked - Ordinary Working day (PHW_OWD) - Pay hours worked @ 1.5 time & accrue 1 alt day. (NZ Only)
Pay Public Holidays Worked - Not Otherwise Working Day (PHW_NOWD) (NZ Only)
Pay Public Holidays Not Worked (phnw)

As stated earlier, you may want Public Holiday Worked “Casual rate” as a separate option here.

Note: You can control if a Public Holiday should be calculated automatically by controlling some assumptions during the phnw step. While the general assumption is that if a day is a public holiday and has a shift it should be paid as a day worked unless it has the public holiday not worked worktype, some businesses may prefer a “Add the working day” asusmption.

Which is best for a given business is an operational decision around how they want to handle their rosters & Timesheets.

Example build public holiday steps

Classify Unpaid Leave (unpaidleave) (If adding more leave types, add them here)
- WHEN has Leave Types (Choose any unpaid leave types)
- THEN assign category unpaidleave
Classify Paid Leave (paidleave) (If adding more leave types, add them here)
- WHEN has shift type of Leave
- AND when does not match above rule unpaidleave
- THEN assign category paidleave
Classify Public Holiday (publicholiday)
- WHEN ANY of the following is true:
  - Timesheet has work type
    - Agreed Alternate Public Holiday (Force Public Holiday)
      Or
  - Timesheet portion is on a public Holiday
- AND NONE of the following are true:
  - Timesheet has work type
    - Agreed Ordinary Day (Not a Public Holiday)
- THEN assign category publicholiday
Classify Public Holiday Not Worked (phnw)
- WHEN ANY of the following is true:
  - Timesheet has work type
    - Public Holiday Not Worked (PHNW)
      OR
  - Timesheet is a Leave Request
    OR
  - Timesheet matches an above rule with category publicholiday
- AND NONE of the following are true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Worked - Ordinary Working Day OWD
    - Public Holiday Worked - Outside Usual Roster
  - Timesheet is a Leave Request
- AND Timesheet matches an above rule with category publicholiday
  This version assumes any day is a public holiday not worked unless explicitly told otherwise.
  You may need to exclude Long Service Leave from this calculation, depending on your jurisdiction and treatment of long service leave & public holidays.
- THEN assign category phnw
Classify Public Holiday Worked (AU Only)
- WHEN ANY of the following is true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Worked
- AND NONE of the following are true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Not Worked (PHNW)
  - Timesheet is a Leave Request
- AND ALL of the following are true:
  - Timesheet matches an above rule with category publicholiday
- THEN assign a category phw
Classify Public Holiday Worked otherwise working day (phw_owd) (NZ Only)
- WHEN ANY of the following is true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Worked - Ordinary Working Day OWD
  - OPTIONAL
    Is within Standard Hours.
    If this is set, then standard hours will make a first assumption if something is an OWD, but this requires that standard hours are set accurately for all employees.
    It may also potentially mean that all shifts come through as part of Otherwise Working Days if they are generated from rosters with temporary standard hour variations set.
- AND NONE of the following are true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Not Worked (PHNW)
    - Public Holiday Worked - Outside Usual Roster - (NOWD)
  - Timesheet is a Leave Request
- AND ALL of the following are true:
  - Timesheet matches an above rule with category publicholiday
- THEN assign a category phw_owd
Classify Public Holiday Worked outside usual roster (phw_nowd) (NZ Only)
- WHEN ANY of the following is true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Worked - Outside Usual Roster
- AND NONE of the following are true:
  - Timesheet has one of the following worktypes:
    - Public Holiday Not Worked (PHNW)
    - Public Holiday Worked - Ordinary Working Day OWD
  - Timesheet matches an above rule with category phw_owd
  - Timesheet matches an above rule with category phnw
  - Timesheet is a Leave Request
- AND ALL of the following are true:
  - Timesheet matches an above rule with category publicholiday
- THEN assign a category phw_owd
Pay Public Holiday Worked (AU Only)
- WHEN Timesheet matches an above rule with category phw
- THEN apply the pay item Public holiday worked
Pay Public Holidays Worked - Ordinary Working day (PHW_OWD) - Pay hours worked @ 1.5 time & accrue 1 alt day. (NZ Only)
- WHEN Timesheet matches an above rule with category phw_owd
- THEN do Multiple Actions
  - Apply the pay item Public holiday worked
  - Apply the pay item Alternative holiday accrual
Pay Public Holidays Worked - Not Otherwise Working Day (PHW_NOWD) (NZ Only)
- WHEN Timesheet matches an above rule with category phw_nowd
- THEN apply the pay item Public holiday worked
Pay Public Holidays Not Worked (phnw)
- WHEN Timesheet matches an above rule with category phnw
- THEN apply the pay item Public holiday not worked

Considerations when customising above option for Public Holiday setup:

Public Holidays and overnight shifts.

You may want to change the definition of Public Holidays according to the above rules slightly if you have overnight shift workers, depending on exactly how you treat your public holidays.

Default Public Holiday Worked or default Public Holiday Not Worked.

Which of these is best for your business depends on how your payroll controls work for approving work on public holidays/if your business routinely trades on a public holiday.

If the business does not normally trade during public holidays, you may want to default to not worked.

If your business routinely trades on public holidays, defaulting to worked may be more appropriate.

Otherwise working day considerations (NZ Only)

Due to the complexity oof the tests determining is a true casual employee should otherwise have worked on a day, these determinations need to be made manually. Again whether a worked public holiday should be assumed to be an otherwise working day or not depends on what most closely matches your businesses process/desired level of control by the Payroll team.

Should unpaid leave be excluded from public holidays?

Depending on the type of leave applied for by an employee, and specific business rules, you may want to exclude periods of unpaid leave from public holiday determinations.

Interactions with Overtime and Ordinary Hours calculations

Due to differing treatments of overtime, you may want to calculate ordinary working hours and overtime after classifying public holidays before paying any public holiday items so you can exclude either ordinary hours or overtime from actual public holiday payouts.