As the holiday season creeps closer, many New Zealand businesses begin preparing for their annual Christmas closedown. Whether you take a full break or operate with a skeleton crew, it is important to get your leave processes right — especially when it comes to giving your team proper notice.
Public Holidays
Christmas Day, Boxing Day, New Year’s Day and the Day After New Year’s are all public holidays.
If an employee would normally work on any of those days, they’re entitled to the day off, paid
OR
If they work, it’s time-and-a-half AND an alternative paid day off.
What the Law Requires
Under the Holidays Act 2003, if you want to require staff to take annual leave for a closedown (like over Christmas/New Year), you must:
- Give at least 14 days’ written notice before the closedown begins. Providing notice is not just a legal requirement — it is good practice.
- Have a genuine business closure — meaning business work must actually stop (or significantly reduce). It can apply to your whole business — or part of it.
- Require employees to take annual leave (if they have leave available). If they do not have any available you will need to agree with them to take unpaid leave or leave in advance.
- If an employee has not yet become entitled to annual leave (e.g., they have worked less than 12 months), you must:
- pay them 8% of their gross earnings to date, and
- reset their leave anniversary to the end of the closedown.
Paying Leave in Advance
Some employers choose to offer annual leave in advance to staff who do not have enough leave to cover the entire closedown. This can be helpful and appreciated — especially around Christmas when finances can be tight.
But it does come with a risk.
If an employee leaves before they’ve earned that leave back, you may need to recover the overpayment, and that can be tricky in practice.
It’s worth weighing up:
- the compliance and cashflow risk for the business,
- the wellbeing of your team, and
- the benefit of supporting staff during a financially pressured time of year.
A balanced, case-by-case approach often works best - just make sure any agreements are clearly documented and signed by both parties.
A Christmas closedown doesn’t need to be complicated. With early notice, clear communication, and a good understanding of how leave works, you will set your business — and your team — up for a calm, stress-free end to the year.