Paying wages when pay day falls on a public holiday
April has several public holidays including Easter and ANZAC Day. Sometimes an employee’s usual pay day coincides with a public holiday.
The first thing that an employer should do is check whether the modern award, enterprise agreement or employment contract specifies when and how an employee must be paid their wages.
Generally, a modern award includes terms specifying how and when wages must be paid. Similarly, an enterprise agreement or an employment contract may contain provisions that deal with how and when wages are paid.
There may even be terms which provide guidance on how wages should be processed when a public holiday falls on the employee’s normal pay day. Here is an example from the Clerks-Private Sector Award 2020:
17.3 Day off coinciding with payday
(a) Clause 17.3 applies to an employee if:
(i) the employee is paid wages by cash or cheque; and
(ii) due to the arrangement of their ordinary hours the employee has a day off on payday.
(b) The employer must pay the employee no later than the working day immediately after payday.
NOTE: The employer may pay the employee on the day before payday if suitable arrangements can be made.
This award allows an employer to pay wages on the day before payday, if possible, but otherwise requires that wages be paid no later than the working day immediately after payday.
What if the award or the employment contract is silent?
Some awards may not contain any clauses that tell an employer what to do when a public holiday occurs on a normal payday.
In these circumstances, an employer may decide to process the wages the day before the normal payday. If this is not possible, the employer should communicate with employees and inform them that due to the public holiday falling on the normal payday, employees will receive their wages the day after the normal payday.
Tips for employers
Below are some tips to help employers prepare for situations where a public holiday coincides with the normal payday:
- Check whether the award/agreement or employment contract specifies how wages should be processed in these circumstances, or whether they specify a day on which wages must be paid.
- Print out a calendar for the entire year and check whether any public holidays fall on a normal pay day.
- If the award/contract is silent on payment of wages coinciding with a day off, then work out internally what the business’ approach will be i.e., will the employees be paid the day before or the day after the normal payday?
- Communicate that approach with employees to manage their expectations.