Public Holidays – Paying Employees and Adding Surcharges

In Australia, celebrating public holidays is a vital part of our country’s culture. As a small business owner, you want to make sure you’re doing right by your employees and customers, especially when it comes to public holidays.

Handling employee pay and navigating surcharges may seem daunting, but you can ensure a smooth and fair process with some insight. In this blog post, we’ll break down the essentials of paying employees on public holidays and adding surcharges, providing you with the knowledge and confidence to handle these situations effectively.

Public Holiday Surcharges

Businesses in the hospitality industry commonly apply a surcharge on public holidays to offset the increased labour costs resulting from penalty rates. Charging a surcharge can help businesses to maintain profitablity while providing customers with services during holidays.

While there is no legal requirement on how much of a surcharge you can charge, the standard is 10-15% for public holidays. Communicating the surcharge to customers is crucial and can be done through clear signage, menu explanations, or promotional materials.

You can find more information about charging and your obligations for communicating surcharges in Queensland here: https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/selling-your-products-and-services/sales-practices/rules-for-total-and-component-pricing

Public Holidays and Employee Entitlements

In Australia, public holidays state and territory legislation governs public holidays, which outlines the entitlements of employees on these special days. Fairwork publishes the public holidays for states and territories for reference here: https://www.fairwork.gov.au/employment-conditions/public-holidays/2024-public-holidays

Employees have the right NOT to work on a public holiday. However, the employer can request the employee work if the request is reasonable which depends on the nature of the work involved and the employee’s position. Fairwork outlines the rights of employers and employees here: https://www.fairwork.gov.au/employment-conditions/public-holidays/not-working-on-public-holidays

Full-time and part-time employees who would normally work on a public holiday are generally entitled to receive paid time off for that day. Casual employees, on the other hand, have a slightly different entitlement, attracting a higher rate of pay for the hours actually worked on public holidays.

Paying Employees on Public Holidays

Employees required to work on a public holiday may be entitled to additional payment in the form of penalty rates. Some Awards or Agreements may swap time off in lieu of penalty rates.
Penalty rates can vary depending on factors such as the applicable modern award, enterprise agreement, or employment contract. You should check the applicable Award, Enterprise Agreement or Employment Contract to communicate the public holiday conditions clearly to your employees prior to the date. You can check the Award or Enterprise Agreement (if registered) can be found at the FairWork Ombudsman here: https://www.fwc.gov.au/agreements-and-awards

Employers should accurately calculate and include penalty rates in the employee’s payment for work performed on public holidays.

If the Award, Agreement or Contract allow for time off in lieu of penalty rate payments for public holidays, then the agreement that the employee agrees to the time off instead of payment must be made in writing.

Transparency and Communication

Open and transparent communication is essential when it comes to public holidays, ensuring that your employees understand their entitlements, penalty rates, and any surcharges being applied.

Keep your employees informed well in advance of any work requirements or changes in policies related to public holidays.

If charging a surcharge on public holidays, ensure that there is clear signage and communication to your customers, this can be by a sign in store, on the menu (a notice that a surcharge will apply on public holidays is notice, you do not need a separate menu). Also consider adding it to your social media and making it clear when customers are ordering.

Staying Compliant

• Keeping accurate records is essential to demonstrate compliance with employment laws and regulations.
• Maintain records of hours worked, payments made, and any penalty rates applied during public holidays.
• Regularly review employment agreements, modern awards, or enterprise agreements to stay informed of specific rules and obligations.

Paying employees and adding surcharges during public holidays in Australia may initially seem complex, but by understanding your employees’ entitlements, accurately calculating penalties, and effectively implementing surcharges, you can navigate public holidays with ease. Remember, transparent communication, compliance, and fair treatment of employees are vital to building a successful business that takes care of its workforce.

Small Biz HQ is here to provide the resources and knowledge you need to confidently handle all your financial matters, allowing you to focus on what you do best – running your business.

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