If My Shop is to Close Down for 3 Weeks for Christmas, Can I Force my Employees to Take Annual Leave?

Over the last few years, the suspension of international travel, the shutting of state borders, and limits on travel are resulting in excessive annual leave accumulation for many employees. As we are nearing the holiday season, many will start to wonder whether they can make their employees take annual leave during the Christmas and New Year closedown period.

Rest assured that if your store regularly closes for Christmas and New Year's, you can require your employees to take a portion of their annual leave during that time, as long as there is only one shut-down period every year. However, it is important to remember that you must give them at least 14 days’ notice before the last day of work.

What if my employee does not want to take leave?

If you have given the proper notice of the closedown period, you can require your employee to take as much of their annual leave balance as is needed to cover that period, whether or not they agree to do so.

What if my employee does not have enough annual leave balance to cover the whole closedown period?

If your employee does not have enough annual holidays entitlement balance to cover the whole closedown period, then you have to agree with your employee that;

1.       They will have to use part of their annual holidays in advance if they have the employer’s approval to do so; and/or

2.       They will take some leave without pay.

What happens if my employee hasn't worked long enough (12 months or more continuously) to be eligible for annual leave?

At the start of the closedown, some employees might not be eligible for annual holidays for the following reasons.

• They haven't been employed regularly by their employer for 12 months, or

• They have been employed by their employer for 12 months, but they have not yet earned the right to annual leave because they took an unpaid leave that lasted longer than a week and pushed back the anniversary date for entitlement, or

• They were paid on a pay-as-you-go basis for annual holidays. 

If this is the case, you are required to pay your employee 8% of their gross earnings (i.e., earnings before PAYE are deducted), starting from the beginning of their employment and ending when the closedown period starts. They will receive this as their holiday pay rather than paid time off.

Alternatively, you can agree with the employee to take some annual leave in advance or take unpaid leave. If so, you will need to move the anniversary date of your employee’s annual holiday entitlement to the date when closedown starts (or, in some situations, an alternative date close by as nominated by the employer).

We can help!

Focus Law can assist you on any of your employment concerns. Contact us to talk to one of our team members at 09 366 6860, info@focuslaw.co.nz, or by filling out our secure and confidential contact form.

Happy Holidays!