As summer approaches, many organisations are preparing for a well-earned break — but it’s also the time of year when pay rates, leave entitlements, and public holidays can become tricky. Getting it right isn’t just about keeping your team happy and engaged – it’s a legal requirement. A little planning now helps protect your business, ensures compliance, and maintains trust with your workforce.
Below are the key considerations every SME should have on their radar in the lead-up to the festive season.
Are You Planning a Shutdown Period for the holiday season?
Some businesses close their doors over Christmas and New Year. If yours is one of them, make sure you understand whether you’re allowed to direct employees to take annual leave.
This depends on the applicable award, enterprise agreement, or employment contract. Most modern awards permit shutdowns with the right notice period — but the rules differ, and non-compliance can create costly issues down the track. If you’re unsure which conditions apply, now is the time to check.
Know the Rules Around Annual Leave Requests
Employees often request additional leave during December and January. While you can approve or decline requests based on business needs, decisions must be fair, reasonable, and consistent with any governing award or agreement.
Clear communication helps: encourage employees to submit their leave plans early and confirm decisions promptly. This supports workforce planning and helps avoid any misunderstandings at a peak time of year.
Public Holidays Should Not Reduce Annual Leave Balances
A common end-of-year payroll mistake: deducting public holidays from annual leave balances during a shutdown or approved leave.
Employees are not required to use annual leave on a public holiday. Your payroll system should automatically exclude these days — but it’s worth double-checking now to avoid corrections later.
Overtime: Use the Correct Holiday and Weekend Rates
Peak periods often create additional workload, and some industries experience significant surges over summer. If employees are working extra hours:
- Ensure overtime is paid at the correct award or agreement rates
- Confirm whether weekend, public holiday, or penalty rates apply
- Review rostering practices to avoid inadvertent breaches
Accurate overtime calculations protect your organisation and reinforce transparent, fair work practices.
Will Your Payday Change? Let Employees Know Early
Bank closures and public holidays can affect your normal payroll cycle. If your usual payday will shift forwards or backwards, communicate this well in advance.
Clarity around pay timing helps employees manage their personal finances — and reduces last-minute payroll scrambling in your business.
Need Help Navigating the Details?
The holiday period shouldn’t leave you second-guessing your obligations. If you need guidance on shutdown rules, pay rates, or entitlements, the Employer Advisory Service (via Fair Work Ombudsman) offers free, tailored advice that can help you stay compliant and confident.
