The holiday period approaches a lot faster than we all anticipate. If you are part of your business’ payroll processing, now is the time to start planning to make sure your holiday processing is smooth for your payroll team and employees.

 

As of May 2023, Fair Work introduced new rules with respect to taking annual leave during shutdown periods. The new rules mean:
  • employers may require employees to take paid annual leave during a temporary shutdown
  • employers must provide at least 28 days’ written notice of the temporary shutdown period to all impacted employees
  • the requirement to take annual leave must be reasonable
  • the notice period can be reduced through an agreement between the employer and the majority of impacted employees
  • an employee who doesn’t have enough paid annual leave to cover the whole period can form an agreement with their employer for other options for the days not covered, such as: using accrued time off, annual leave in advance, or leave without pay.
These changes apply to specific industries, and we recommend all employers check their industry to ensure their approach is in line with the relevant modern awards employees are employed under.

Corporate Businesses

The holiday period can look very different across industries. For more corporate or office-based organisations, this is when things start slowing down and there are generally shut down periods between Christmas and New Years, including the public holidays. It’s a great opportunity for employees to take some well-deserved time off after a big year.

In these situations, things to consider for your payroll team include;

  • making sure leave requests have been submitted well in advance;
  • confirming that public holidays are set up in your payroll system to ensure additional leave isn’t taken by employees who have taken leave over this period;
  • considering whether there needs to be skeleton staff working over this period;
  • Many of these employees are also salaried and paid monthly, which means you can just move your payroll payment date forward if you usually pay in the later half of the month.

If you’re processing payroll for these industries, there is still a bit of planning to do, but it can be relatively straightforward.

 

Non-Corporate Organisations

We then move to industries that don’t wind down over the holidays. This is where we think about the retail industry with customers rushing around buying last-minute Christmas presents, and the hospitality industry with all the Christmas parties, dinners and general summer busy-ness. We also need to consider those in healthcare industry, as we know that this sector doesn’t slow down, full stop.

For payroll, this means considering rosters, public holiday penalty rates, consecutive days on and off, and the need to hire more staff to cover shifts. As these industries tend to attract more casual employees, and more employees being paid hourly under award conditions, they are generally also paid more frequently. So if you have a weekly or fortnightly payroll it’s likely you’re going to have a payment date that falls right in the middle of all those public holidays.

 

We will cover some of the common factors you should consider during the holiday season:

Have a cut off date for holiday period leave – Communicate a clear cut off date to employees who want to apply for leave over the holidays. This gives you time to plan your rosters in advance around leave that has been submitted.

Communicate shut down period – If there is a shutdown period, you need to make sure that employees are made aware of expectations around this time well in advance. Some organisations will provide employees the days off without having to take leave, and some businesses will direct employees to take the days out of their annual leave balance. It’s important that employees understand what the policy around this is, and what happens if they don’t have enough leave to cover the period.

Check your award or agreement if you are directing employees to take annual leave – Some awards and agreements will have specific rules around whether you are legally able to direct employees to take leave or not. If you pay under an award, you can use this tool to assist

Plan and complete rosters in advance – You may need to work closely with other departments to determine what the staffing needs and budgets are over the holiday period, . It’s a great idea to create a roster template in your rostering software and include any approved leave, full-time and part-time employees who work regular shifts, and roster your casual employees around this where gaps need to be filled.

Hiring employees for holiday period – Completing your rosters early can help determine whether you need to hire seasonal employees to fill any gaps. You always want to be doing this a few months before things start to get busy so your new employees are trained and comfortable in their role.

Check award or agreement conditions around rostering – For those industries that get busier this time of year, make sure to check your award around conditions such as public holiday penalties, overtime penalties, consecutive days rostered and consecutive days off.

Make sure you are paying public holidays correctly – This year Christmas day and New Years day fall on the weekend and are observed on the following Monday, but in some states both days are considered public holidays and should be paid as such. You also want to check if different penalties apply for Christmas Day compared to other public holidays.

Check for award conditions around Time in Lieu instead of penalty rates – Some awards and agreements allow employees to accrue time in lieu instead of being paid penalties for work performed on public holidays. You will need to consider what ratio this is accrued in, and the parameters around when this leave must be taken by.

Check the dates that you usually process pay runs and payments to employees – Make sure you are scheduling payments on days where the banks are open and processing payments. This might mean that you need to move your payment date forward a few days, or even pay in advance in some circumstances, and make any adjustments in future pay runs.

Communicate with your employees – Whether you send out communications to employees directly, or you’re feeding down information through managers and team leaders, make sure people know what the expectations are as soon as they are final. At a minimum, is best practice that employees are aware if they need to take leave, when they need their leave requests submitted by, when they need to work and when they will be paid.

 

The holidays are fast approaching, and now is the time to start thinking about how this is going to look for your payroll department. To help you start planning and keep you on track, we have created a Payroll Holiday Period Checklist to sit along side this blog.

10 Point Payroll Holiday Shutdown Checklist

About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.

 

Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

 

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