Managing Public Holiday Pay: A Guide For Employers

Public holidays are part of running a business, but they can still cause confusion for many employers.

Questions often arise around whether employees can be required to work, what pay rates apply, and what to do if the business needs to remain open.

Getting this wrong can lead to payroll mistakes, employee dissatisfaction, or even breaches of workplace laws.

Understanding the basic rules under the Fair Work Act and the relevant modern award can help you manage public holidays with confidence and avoid unnecessary risk to your business.

Below is a practical overview of what every employer should understand when it comes to public holidays.

Public Holiday Pay & Entitlements

Under the National Employment Standards (NES), employees are entitled to be absent from work on a public holiday. These include nationally recognised holidays such as Christmas Day and Australia Day, as well as state or territory-specific holidays.

In Tasmania aswell as other states, employees are generally entitled to the day off if it falls on a day they would normally work.

If the employee does not work on the public holiday, they are typically entitled to their base rate of pay for the ordinary hours they would have worked that day.

This applies to:

• Full-time employees

• Part-time employees (for their usual working day)

Casual employees do not receive payment if they do not work on a public holiday, as their engagement is based on hours actually worked.

Can Employers Require Employees to Work?

An employer may request an employee to work on a public holiday if the request is reasonable.

Similarly, an employee may refuse the request if the refusal is reasonable.

The Fair Work Act requires both sides to consider a number of factors when determining whether the request or refusal is reasonable, including:

• The nature of the business and operational requirements

• The employee’s personal circumstances, including family responsibilities

• Whether the employee could reasonably expect to work on public holidays

• The amount of notice provided

• The type of employment (for example full-time, part-time, or casual)

• The compensation or penalty rates payable for working that day

Industries such as hospitality, healthcare, agriculture, and emergency services commonly require staff to work on public holidays. In these sectors, it may be reasonable to expect employees to work if appropriate compensation is provided.

Pay Rates and Penalties

Public holiday pay is primarily determined by the modern award covering the employee.

Most awards provide penalty rates for public holiday work, which may include:

• A higher hourly rate (often 225% or 250% of the base rate)

• A minimum number of hours payable for the shift

• Additional allowances in some industries

Public holiday entitlements can vary significantly depending on the modern award that covers your employees. While the National Employment Standards set the baseline entitlement to be absent on a public holiday, the applicable award determines what happens when employees actually work on that day.

Employers should always confirm the applicable provisions in the relevant award before rostering employees to work on a public holiday.

Substituting a Public Holiday

In some situations, a public holiday may be substituted for another day.

This can occur when:

• A public holiday falls on a day the employee would not normally work

• The business operates on different trading days

• A modern award or enterprise agreement allows substitution

• Both parties agree to an alternative day

If a substitution occurs, the agreement should be clearly documented in writing to avoid misunderstandings about entitlements.

Many awards specifically require agreement between the employer and the employee before a substitution can occur.

Considerations for Part-Time and Casual Employees

Public holidays can be particularly confusing when managing part-time and casual employees.

Key points to remember:

Part-time employees

• If the public holiday falls on a day they would normally work, they are generally entitled to be paid for their ordinary hours if they do not work.

Casual employees

• Casual employees are only paid if they work the shift.

• However, if they do work on a public holiday, the applicable public holiday penalty rate will usually apply under the relevant award.

Employers should ensure rosters and payroll systems reflect these differences.

Planning and Communication

Public holidays are predictable events, which means planning ahead can prevent most issues.

Practical steps include:

• Reviewing the applicable award in advance

• Identifying operational requirements for the public holiday period

• Providing employees with sufficient notice of roster changes

• Confirming pay rates or penalty rates that will apply

• Recording any agreements regarding substituted days

Clear communication helps ensure employees understand expectations and entitlements before the public holiday arrives.

Final Thoughts

Public holiday obligations are governed by both the National Employment Standards and the modern award covering your employees.

While the rules may seem complex at first, most issues can be avoided by understanding a few key principles and planning ahead.

If you are unsure how public holiday rules apply to your business, reviewing your awards, rostering practices, and payroll setup can make a significant difference. Taking the time to get these systems right not only protects your business from compliance risks but also helps build trust and transparency with your team.

If you would like assistance reviewing your employment arrangements or ensuring your payroll and rostering practices align with workplace laws, professional HR advice can help you implement practical systems that keep your business compliant and running smoothly.

See what we can do for you, and the HR Support Options available to your business. Let’s make managing HR the least of your worries. 

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Need help? Contact us today - sandra@hrconsultingtas.com.au or 0408 408 225  

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