This article provides an overview of how the platform determines otherwise working days when a public holiday falls within a pay period. It also provides guidance on how to configure business and employee settings to ensure accurate otherwise working day test and public holiday calculations.
Public holiday entitlement: The concept of Otherwise Working Day (OWD).
The remuneration of a public holiday starts with determining whether the public holiday falls on an otherwise working day for the employee. This is explained in Clause 12 of the Holidays Act 2003, sub clause (4):
For the purposes of public holidays, if an employee would otherwise work any amount of time on a public holiday, that day must be treated as a day that would otherwise be a working day for the employee.
Helpful Hint
Note that while section 12 “applies for the purpose of determining an employee’s entitlements to a public holiday, an alternative holiday, to sick leave, to bereavement leave, or to family violence leave”, this article focuses on the processing of public holidays only.
How is an otherwise working day (OWD) determined in Employment Hero Payroll
Broadly speaking, employees will fall into two categories:
Employees who have a defined work week and employees who do not have a defined work week i.e. their working days and hours vary from week to week. This may be the case for industries where work is weather or attendance dependent such as primary sectors or hospitality.
This means that the employee’s work week as it is set up, will drive how an otherwise working day is determined.
Employment Hero Payroll enables a wide spectrum of employee set ups from a standard basic Monday to Friday work week (SWW) or an advanced work week (AWW) to an irregular week where every week and every day can be different.
Employee set ups at a glance
| Employee set up | Week set up | Default earnings | Timesheet setting |
|---|---|---|---|
| 1 | Standard basic (SWW) | Y | Do not use timesheets |
| 2 | Standard basic (SWW) | Y | Use timesheets for exceptions only (e.g. overtime) |
| 3 | Standard basic (SWW) | Use timesheets to submit all time worked | |
| 4 | Standard Advanced (AWW) | Y | Do not use timesheets |
| 5 | Standard Advanced (AWW) | Y | Use timesheets for exceptions only (e.g. overtime) |
| 6 | Standard Advanced (AWW) | Use timesheets to submit all time worked | |
| 7 | Irregular employee | Use timesheets to submit all time worked | |
| 8 | Casual irregular employee | Use timesheets to submit all time worked |
When a public holiday falls in a pay period, Employment Hero Payroll runs an OWD test for each employee. The OWD test essentially answers the question: Would the employee have been at work on the day the public holiday falls? To do so, the system refers to the employee’s pay run defaults where the employee’s week is defined.
OWD test by employee set up
| Employee set up | Week set up | Default earnings | Timesheet setting | OWD run on | OWD days |
|---|---|---|---|---|---|
| 1 | Standard basic (SWW) | Y | Do not use timesheets | SWW | Mon-Fri |
| 2 | Standard basic (SWW) | Y | Use timesheets for exceptions | SWW | Mon-Fri |
| 3 | Standard basic (SWW) | Use timesheets to submit all time worked | SWW | Mon-Fri | |
| 4 | Standard Advanced (AWW) | Y | Do not use timesheets | AWW | As per AWW |
| 5 | Standard Advanced (AWW) | Y | Use timesheets for exceptions | AWW | As per AWW |
| 6 | Standard Advanced (AWW) | Use timesheets to submit all time worked | AWW | As per AWW | |
| 7 | Irregular employee | Use timesheets to submit all time worked | Timesheets | Any weekday | |
| 8 | Casual irregular employee | Use timesheets to submit all time worked | Timesheets | Any weekday |
Note: Because employee set ups drive the outcome of the OWD test and ultimately whether a public holiday is remunerated, they should be a true reflection of a current individual employment agreement and of the employee’s current actual work week. As such, employee set ups are not "set and forget" and should be regularly audited.
Employee set up 2- Standard work week with timesheet for exceptions
OWDs: Monday to Friday
Employee set up 5- Advanced work week with timesheet for exceptions
Auditing employee set up
Employee data can be downloaded from payroll settings → import employees → export, or from payroll settings → data extracts → data type = Template with employee data.
Column headers relevant to employee set up auditing:
- EmploymentType
- PrimaryPayCategory
- HoursPerWeek
- HoursPerDay
- AutomaticallyPayEmployee
- IrregularEmployment
- IsEnabledForTimesheets
Once the data has been downloaded into excel, the data can be analysed by using filters or pivot tables.
Regular audit of those fields will highlight potential inconsistencies with documentation from HR giving payrollers an opportunity to correct set ups and ensuring that payroll outcomes are correct and compliant.
The below screenshot shows employee data where only the above column headers were kept. The remaining column headers were removed.
Business settings relevant to automated public holiday functionality
-
Public holidays:
Public holiday and provincial anniversary dates are automatically loaded in the platform with the applicable region/province configured accordingly. As such, there is no manual user intervention required. The full public holidays calendar can be viewed under payroll settings → business management → public holidays. -
Locations:
Each locations must have a regional anniversary day specified under payroll settings → pay run settings → locations. -
Work types and pay categories:
Work types are used in timesheets. When an employee submits a timesheet for a public holiday, they will use one of the following work types:
• Public holiday worked: Linked to the Public Holiday Worked pay category.
• Public holiday not worked: Linked to the Public Holiday Not Worked pay category.
These work types are automatically available to permanent and casual employees. If you have existing work types, they should be mapped to the correct system pay categories to trigger the correct remuneration (RDP, ADP) and leave accrual (alternative holiday). -
Advanced settings:
The public holiday automation and the otherwise working day test on timesheets are located under payroll settings → advanced settings.
The public holiday automation setting automates public holiday remuneration for employees on default earnings. The otherwise working day test on occurrences automates public holiday remuneration for irregular employees.# Week set up Default earnings Timesheet setting Public holiday remuneration triggered by 1 Standard basic (SWW) Y Do not use timesheets Public holiday automation 2 Standard basic (SWW) Y Use timesheets for exceptions Public holiday automation 3 Standard basic (SWW) Use timesheets to submit all time worked Timesheet for public holiday not worked/worked 4 Standard Advanced (AWW) Y Do not use timesheets Public holiday automation 5 Standard Advanced (AWW) Y Use timesheets for exceptions Public holiday automation 6 Standard Advanced (AWW) Use timesheets to submit all time worked Timesheet for public holiday not worked/worked 7 Irregular employee Use timesheets to submit all time worked Timesheet for public holiday not worked/worked 8 Casual irregular employees Use timesheets to submit all time worked Timesheet for public holiday not worked/worked
Public holiday automation for employees with a defined work week
As previously explained, unless the employee is ticked as irregular, the system runs the OWD test based on the week stated in the employee’s pay run defaults.
Note that while employee set ups 3- and 6- submit timesheets for all time worked, the public holiday automation will be based on the week defined in the employee’s pay run defaults.
The system will not use timesheet data to run the OWD test for these employee set ups.
Employee set ups 3- and 6- have a defined work week and their timesheet history should be a true reflection of the defined work week. If this is not the case, the employee’s work week should be reviewed and amended. If a work week can no longer be defined, the employee should be ticked irregular employment.
Otherwise Working Day test for irregular employees
If you have ticked irregular employment for an employee, the system will use the employee’s payroll history to test whether a public holiday falls on an OWD. The test is run at the time the timesheet is created, whether individually or in bulk, and again in the pay run. As this test is currently not legislated, businesses can set the test parameters under advanced settings. Both the test period duration and the minimum occurrences that must be reached, can be set.
To set the test:
- Log into your Payroll platform.
- Navigate to Payroll Settings.
- Select Advanced Settings.
- From here, both the test period duration and the minimum occurrences that must be reached, can be set.
The OWD test period
The OWD test period end falls on the day immediately before the public holiday being tested and starts as per the number of weeks stated in the OWD test setting under advanced settings.
Note that the OWD test period start and end dates are displayed in the public holiday entitlement context panel in the pay run.
The OWD test explained
The OWD test runs at two levels: When creating timesheets and when processing a pay run. Both the timesheet and the pay run OWD tests use the same rules.
| # | Week set up | Default earnings | Timesheet setting | Where is the OWD test run? |
|---|---|---|---|---|
| 1 | Standard basic (SWW) | Y | Do not use timesheets | Pay run |
| 2 | Standard basic (SWW) | Y | Use timesheets for exceptions | Pay run |
| 3 | Standard basic (SWW) | Use timesheets to submit all time worked | Timesheet and pay run | |
| 4 | Standard Advanced (AWW) | Y | Do not use timesheets | Pay run |
| 5 | Standard Advanced (AWW) | Y | Use timesheets for exceptions | Pay run |
| 6 | Standard Advanced (AWW) | Use timesheets to submit all time worked | Timesheet and pay run | |
| 7 | Irregular employee | Use timesheets to submit all time worked | Timesheet and pay run | |
| 8 | Casual irregular employees | Use timesheets to submit all time worked | Timesheet and pay run |
The timesheet OWD test
Please refer to this article for details on public holiday automation for timesheet employees. The timesheet OWD test follows the same rules whether a timesheet is created individually or is bulk generated.
As the test period starts on the day immediately before the public holiday being tested, some not yet processed timesheets or leave requests may fall within the test period. As such, approved timesheets and approved leave requests can be counted as occurrences by the timesheet OWD test.
For the timesheet OWD test to be consistent with the pay run OWD test, timesheets must be approved BEFORE timesheets for public holiday are created. This ensures that the system has all the timesheet data required to run the timesheet OWD test.
In the below screenshot, Mon 20/04 will be counted as an occurrence by the timesheet OWD test for Mon 27/04 (ANZAC) only if the timesheet has been approved.
Equally, the timesheet OWD test is able to scan for leave requests falling within the pay period set in the timesheet and count these as occurrences. Note that, as per best practice for irregular employees, leave requests should only be applied directly to a pay run and not to a timesheet.
Important
Timesheets must be approved to be counted as occurrences. Submitted timesheets cannot be counted as they can still be edited, rejected or deleted.
To be counted as a worked occurrence, a timesheet must be remunerated.
To be counted as an occurrence, an approved leave request must be processed within the pay period it falls in.
Leave requests for Leave without pay - annual holidays or for Leave without pay - (excluding annual holidays) applied to a timesheet, are not counted as an occurrence by the timesheet OWD test. Equally, leave requests for Leave without pay - annual holidays or for Leave without pay - (excluding annual holidays) applied directly to a pay run, are not counted as an occurrence by the pay run OWD test.
When creating an individual timesheet, in the green public holiday banner, the system will display the irregular value of a day in hours as at the first day of the pay period set in the timesheet. This can be reconciled with the irregular employment report run as at the first day of the pay period.
For mondayised public holidays, the timesheet OWD test will be displayed for both the original public holiday and its Monday/Tuesday equivalent. As a public holiday can only ever be remunerated once, the test can only ever be met for either the original public holiday that falls on the weekend or for its Monday/Tuesday equivalent.
The pay run OWD test
Employees with a defined work week on default earnings (set ups 1; 2; 4 and 5)
are only subject to the pay run OWD test which runs on the week defined in their pay run defaults.
When the system detects a public holiday within the pay period and if the pay run OWD test is met, the following is automated:
An earnings line for the pay category public holiday not worked is generated and remunerated with RDP or ADP as per the employee’s setting.
A reversal line is generated against the employee’s primary pay category.
The public holiday entitlement context panel can be open by clicking the i on the earnings line. We can see confirmation that the public holiday falls on an OWD as per the employee's work week defined in their pay run defaults.
If the employee submits a timesheet for public holiday worked which is then approved and imported into a pay run, the following is automated:
The public holiday not worked earnings line is wound back.
The reversal earnings line against the employee’s primary pay category is kept.
An earnings line for public holiday worked is generated and is remunerated at time and a half.
If the pay run OWD test is met, one day of alternative holiday is accrued.
The public holiday entitlement context panel can be open by clicking the i on the earnings line. We can see confirmation that the public holiday falls on an OWD as per the employee's work week defined in their pay run defaults.
Employees with a defined work week on timesheets (set ups 3 and 6)
For these employees, the timesheet OWD test has already run. As the pay run OWD test runs on the same rules, it will only confirm what was already established at timesheet level.
If the employee submits a timesheet for public holiday not worked which is then approved and imported into a pay run, the following is automated:
An earnings line with the pay category public holiday not worked is generated and remunerated at RDP or ADP as per the employee’s settings.
The public holiday entitlement context panel can be open by clicking the i on the earnings line. We can see confirmation that the public holiday falls on an OWD as per the employee's work week defined in their pay run defaults.
If the employee submits a timesheet for public holiday worked which is then approved and imported into a pay run, the following is automated:
An earnings line for public holiday worked is generated and is remunerated at time and a half.
If the pay run OWD test is met, one day of alternative holiday is accrued.
The public holiday entitlement context panel can be open by clicking the i on the earnings line. We can see confirmation that the public holiday falls on an OWD as per the employee's work week defined in their pay run defaults.
Irregular employees
For irregular employees, the timesheet OWD test has already run. As the pay run OWD test runs on the same rules, it will only confirm what was already established at timesheet level. The crucial difference for irregular employees is: The OWD test no longer looks at the week stated in the employee’s pay run defaults but looks at the employee’s previous payroll history. How far the test looks depends on the test period set under advanced settings.
If the employee submits a timesheet for public holiday not worked which is then approved and imported into a pay run, the following is automated:
An earnings line with the pay category public holiday not worked is generated and remunerated at RDP or ADP as per the employee’s settings.
The public holiday entitlement context panel can be opened by clicking the i on the earnings line. Because the system is now looking at the employee’s payroll history, the employee work pattern from the test period is displayed.
If the employee submits a timesheet for public holiday worked which is then approved and imported into a pay run, the following is automated:
An earnings line for public holiday worked is generated and is remunerated at time and a half.
If the pay run OWD test is met, one day of alternative holiday is accrued.
The public holiday entitlement context panel can be opened by clicking the i on the earnings line. Because the system is now looking at the employee’s payroll history, the employee work pattern from the test period is displayed.