Managing annual closedowns

Many businesses have an annual closedown period, often over Christmas or seasonally based on industry.

Employers can require employees to take annual holidays during the closedown provided they give the employees 14 days’ notice. If employees are not entitled to annual holidays at the time of closedown, they must pay them 8% of their gross earnings (less any amount already paid as 8% pay as you go or already taken as annual holidays in advance) as at the closedown date from:

• the start of their employment if they haven’t worked continuously for 12 months for their employer, or
• their last anniversary date for annual holidays if they have already worked for their employer for at least 12 months.

Alternatively, the employer and employee may agree that the employee may take the period of closedown as annual holidays in advance.

To pay an employee 8% holiday pay

1. In a pay, enter 1 in the quantity field against the HP (holiday pay) pay code.
2. Press OK to the displayed message.
3. Complete the pay run as normal.

Once the pay is finalised, you also need to move the employee's next anniversary date to be 12 months from the commencement of the closedown period. See the next task for instructions.

To avoid having a different date in each year on which the employee becomes entitled to annual holidays, you may nominate a date which must be treated as the date on which the closedown begins provided that the date nominated is reasonably proximate to the actual beginning of the closedown period.