The silly season is approaching and that means cocktails, Christmas, sunshine and ensuring your staff are sorted for the holidays. So it’s important to have a clear understanding of your employees’ annual leave entitlements.
While managing your business over the holiday break can be tricky, particularly for SMEs working with smaller teams, the sooner you’re able to get your logistics sorted, the sooner you can start getting into the holiday spirit. If you’re planning your company’s Christmas payroll, roster and bonuses, here are the main things to keep in mind.*
What are your Christmas holiday opening hours?
The first decision you’ll need to make is whether to shut down completely over the Christmas and New Year break, or to run on a skeleton crew.
The holiday season is a slow period for most businesses, which is why it makes sense to shut down completely, both from a cost point of view, and to give yourself and your employees some much needed R&R.
The majority of businesses shut down for 1-2 weeks during the Christmas and New Year period. It’s up to you to consider your own business needs and make the final call – some SMEs shut up shop for 4, or even 6 weeks.
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Are you directing an employee to take annual leave?
No matter what your opening hours are, your employees will most likely take time off to spend with family and friends. You can either direct your team to take annual leave, or work out an agreement for unpaid leave – or a combination of the two.
Before finalising your dates, read up on awards and agreements for your industry. Different industries have different regulations on whether employees can be directed to take annual leave, so check the Fair Work Ombudsman (FWO) website for up-to-date information.
Keep in mind that if you need team members to stay on deck, you’ll have to pay them a normal salary for regular working days.
Have you sent your Christmas shutdown notice to employees?
If you’re closing up shop, you have to give your team plenty of notice. The FWO requires all businesses to give employees a minimum notice period before a shutdown, especially if you’re directing employees to take annual leave.
Again, the minimum notice period is different depending on your industry award. Check your industry’s requirements on the FWO website to make sure you’re meeting your legal requirements. The FWO also provides a handy Christmas shutdown notice letter template that you can use for your shutdown notice.
Are you calculating annual leave entitlements correctly?
If your employees are running low on leave, you can either ask them to take it in advance, or come to an agreement on unpaid leave. Legally you can’t force anyone to take unpaid leave, even during shut down. If you can’t come to an agreement, you’ll have to pay the employee their regular pay rate.
Christmas, Boxing Day, and New Year’s Day are also national public holidays. Employees have to be paid their base salary during this time, and it can’t be deducted from their leave. If you stay open, you’ll have to pay employees award public holiday rates for those days. Employees also accrue annual leave during this time, even if they are on leave.
Are you paying bonuses to employees?
Santa isn’t the only one who can give gifts! The holiday period is the perfect time to give bonus payments to employees, to thank them for their hard work and get your team excited for the year ahead. There’s no hard and fast rule for how to calculate bonuses for employees, but the most common ones are:
- A percentage of weekly or monthly salary (like a 13th month)
- A flat bonus for all employees
- A performance-based bonus
Remember: bonuses have specific tax laws so Christmas bonus calculators you use should take that into account.
Even if you don’t give a holiday bonus, there are plenty of other ways to thank your team for their hard work. Throw a company Christmas party, have a team lunch, or put together a little gift hamper to show your appreciation – it’ll pay off tenfold in the long run.
Managing the holiday period doesn’t have to be a headache! With a bit of planning and preparation, you can set your business to end the year with plenty of cheer.
*We endeavour to provide accurate material for Australian businesses consistent with Australian employment and tax laws; however, this material is for reference only and is not designed to be, nor should it be regarded as professional advice.