The two entitlements: time-and-a-half plus an alternative day
Anyone who works on a public holiday in New Zealand is entitled to two things at the same time. The first is a higher pay rate: at minimum, time-and-a-half of your relevant daily pay for the hours you actually work. The second is an alternative holiday — a paid day off, taken later, that you keep on the books until you use it. Both entitlements are written into Part 2 of the Holidays Act 2003 and you cannot trade one off against the other in your contract.
The time-and-a-half is automatic. The alternative holiday, however, only applies if the public holiday fell on what the Act calls an "otherwise working day" for you. That test is the heart of how the Act treats different working patterns differently, and it is where most disputes arise. We unpack it below.
How time-and-a-half is actually calculated
Time-and-a-half is calculated against your relevant daily pay — what you would have earned that day under your normal pay arrangements, including most regular allowances and incentive payments. If you are paid an hourly rate, that is straightforward: your hourly rate multiplied by 1.5, multiplied by the hours you worked. A baker on $28 an hour who works a six-hour shift on Easter Monday earns $252 ($28 × 1.5 × 6) for the day, before any productivity bonus or shift loading.
If your pay varies week to week, or you cannot easily work out what you would have earned, your employer can use your average daily pay instead. That figure comes from your gross earnings over the past 52 weeks divided by the number of whole or part days you actually worked. Average daily pay is the fallback, not the default — your employer should use relevant daily pay first if it can be reasonably worked out.
Salaried workers are owed the same minimum. Your employer needs to derive an hourly rate from your annual salary, then apply the time-and-a-half multiplier to the hours you worked. Working a full eight-hour day on a public holiday is worth twelve hours of ordinary salary on top of your normal pay for that pay period.
The otherwise working day test
Whether you also get an alternative holiday depends entirely on whether the public holiday fell on a day you would otherwise have worked. The Act calls this the "otherwise working day" test, and it is decided case by case. Three things go into the answer: what your employment agreement says about your hours, what your roster looks like, and what your actual pattern of work has been over the previous few weeks. No single one of these is decisive, but together they usually point to a clear answer.
For full-time, weekday workers the test is easy. If Labour Day falls on a Monday and you always work Mondays, that was an otherwise working day, so you get both the time-and-a-half pay and the alternative holiday. For shift workers, the answer is whatever your roster says: if you were rostered on, it was an otherwise working day. If your roster genuinely changes week to week, your employer should look at your actual pattern over recent weeks rather than the schedule for one week alone.
Where the test gets contested is for variable, on-call, or casual work. A useful sanity check: if your employer would normally have asked you to work that day if it were not a public holiday, then it was an otherwise working day. If they would not have, it was not. Get that view in writing if you can — it makes the entitlement easier to enforce later.
What an alternative holiday is worth
An alternative holiday is a full paid day off, not a fixed number of hours. The pay for that day is your relevant daily pay or average daily pay — whichever applies — for the day you actually take off, not the day you worked. So if you work three hours on a public holiday and later take a full eight-hour day as your alternative, you are paid for eight hours when you take it. This sometimes works in workers' favour and sometimes against them, depending on the shift you put in.
You choose when to take an alternative holiday, in agreement with your employer. Your employer cannot force you to take it on a specific date, and they cannot make it expire. There is no statutory deadline by which it must be used. Practically, most workers take theirs within a few months, often bridging a weekend or extending an existing leave block.
If you leave your job before using an accrued alternative holiday, your employer must pay it out in your final pay at your relevant daily pay rate. This catches a lot of seasonal and hospitality workers off guard — check your final payslip if you have built up alternative holidays during your employment.
Cashing up an unused alternative day
You can ask your employer in writing to pay out an unused alternative holiday in cash, but only after you have held it for at least twelve months. The employer can then agree or refuse. If they agree, the payment is at your relevant daily pay or average daily pay, and it should appear on your next payslip. The twelve-month minimum is a one-way protection: it stops employers from quietly converting time off into cash, but it lets workers who would rather have the money make that call once enough time has passed.
Until that twelve-month point, neither side can swap the day for cash. You have to take it as time off, and your employer has to make it available. This is one of the few areas where the Act tilts firmly toward the worker keeping the day, not the cash.
What to do if your pay looks wrong
Check your payslip in the pay period covering the public holiday. You should see the hours worked at the higher rate (often labelled as PH 1.5 or similar), and any alternative holiday accrued should appear on a separate balance line on later payslips. If the time-and-a-half is missing, raise it with your manager or payroll first — most cases are administrative errors that get fixed in the next run.
If raising it informally does not work, the next step is the Ministry of Business, Innovation and Employment's Employment Service Centre on 0800 20 90 20. They will explain your entitlement and, where appropriate, contact your employer on your behalf. For unresolved disputes, you have ninety days from the issue to lodge a personal grievance with the Employment Relations Authority. Keep your payslips, roster, and any written communication with your employer — they are the evidence the Authority will rely on.
For employers, the safest position is to write the public holiday rules into your payroll system once and let it run automatically. Employment.govt.nz publishes worked examples covering most edge cases, including shift workers, salaried staff, and varied rosters. Underpayment is one of the most common causes of personal grievance claims in New Zealand, and it is almost always cheaper to get the calculations right the first time.