Concern for 43,000 casual workers left behind by Matariki holiday
Employers aren’t the only ones counting the cost of the first new holiday in nearly 50 years
Next week New Zealanders will celebrate Matariki as a public holiday for the first time, but official estimates say it will cost some workers $7 million in lost income.
This is on top of the $436 million cost to public and private sector employers in paying for lost productivity and time-and-a-half for those who are registered to work during the holidays. HR consultants and small business owners such as ACT MP Chris Baillie warn that this places an additional burden on struggling SMEs.
Because the holidays will always be on a Friday – a busy day for hospitality and retail businesses – the cost will be higher. The usual Monday bank holidays have less of an impact, as many restaurants in particular are closed on Mondays.
In a submission to MPs, public sector union PSA expressed support for the new public holiday, but also concern for the 43,000 casual workers who officials say will miss a day of paid work.
“Casual workers are only paid for the days worked,” said Andrew McCauley, PSA’s senior adviser for policy and strategy, speaking to Newsroom this week. “The volume of workers affected highlights the urgent need for the government to continue its regulatory work around casual work, to ensure that workers only have casual contracts when their work is genuinely casual in nature.
“It also highlights the problem of precarious and precarious work more generally: casual workers have less security, have less say and are more vulnerable. Ensuring strong rights for all workers should be an ongoing priority for the government.”
McCauley says he hopes government-led work around casual and contract workers can help fix this anomaly in vacation law.
“Because things are so tight here right now and people don’t seem to be coming out, it’s a perfect storm. We are a hospitality business and we can’t just close shop, so we have to deal with it.
– Chris Baillie, ACT MP and publican
The Department of Business and Innovation, in its regulatory impact statement, says some employees may have reduced working hours and suffer a loss of income if business owners decide not to open on the public holiday.
And in addition: “For casual workers, the extra free time provided by the rest day would reduce their income because they are only paid for the days worked.”
For an additional holiday Monday, around 39,000 people would have been affected – but as it was a Friday, MBIE calculated around 43,000 casual workers could be affected at an estimated cost of $7 million to their earnings for the day .
MBIE also estimates that an additional public holiday will reduce New Zealand’s GDP by around $358.8 million per year. “This would come in the form of lost production due to businesses and other employers choosing not to operate, resulting in a net economic loss to New Zealand.”
On the other hand, MBIE says overseas research shows there are social capital gains for individuals and the community in observing public holidays. “While time off may be provided by other forms of leave, the provision of public holidays is associated with additional benefits due to the coordinated nature of the leave.”
Studies suggest that the individual value of free time could range from 50 to 100 percent of average earnings. That means individual benefits in the form of extra leisure time are worth between $163.7 million and $327.5 million for the day, MBIE estimates.
In a notice this month, Employment NZ says Matariki will always fall on a Friday: “Employees working on the Matariki public holiday must be paid at least 1.5 times. If Friday is a normal working day for them, receive paid leave on a date agreed to by both parties.
“I’m a small business owner and in the current economic situation, the last thing we need is to pay for another holiday.”
– Stephen Murphy, employer
“They are not entitled to a compensation day if they only work on public holidays [or] they were on call but didn’t have to work, and being on call didn’t stop them from doing what they wanted to do with their day.”
For example, the notice states that a doctor on call cannot drink.
Employer Stephen Murphy made a submission to the Select Committee opposing Matariki Statistics Day. “I’m a small business owner and in the current economic situation, the last thing we need is to pay for another holiday,” he explains.
ACT Party small business spokesperson Chris Baillie is another employer who says the bureaucracy and added costs are getting too much. He employs 25 to 30 people – ranging from executives to a few minimum-wage students – at The Honest Lawyer pub in Nelson.
He will return from Parliament first thing next Friday and go straight to his business to lend a helping hand washing the dishes, to try and save on labor costs. “I have fantastic staff, every single one of them. From my managers to room cleaners and the like, they actually know more about running a business than a lot of politicians.”
The Honest Lawyer, on a promontory south of the city’s airport, has a pub, restaurant, reception hall and 13 bedrooms of accommodation. It makes up to 100 covers on a good night.
“I just phoned the bank manager, trying to get more funds,” Baillie said. “It’s just typical of businesses, across the country, that have really struggled trying to survive all the other additional costs.”
The law does not oppose Matariki, but argues that it should replace another public holiday – Baillie suggests removing regional birthdays.
Its manager calculates that the new holiday will cost the company $5,000 more and more than a typical Friday. “Coming out of Covid, with everything else that’s being weighed on businesses like the minimum wage increase, which affects a lot of businesses because it’s really hard to maintain a margin above that.”
“It is very likely that the number of redundancies will start to increase due to Covid, especially with the latest lockdowns, and adding additional costs to companies will only increase this.
– Lisa Mackay, HR Toolkit
He also watches nervously as his outsourced payroll system handles the first extra holiday since 1974; he says he won’t know for sure until the following week.
“Friday evenings are normally big days for us. Our employees are paid very well on public holidays: they will have a time and a half and a day of compensation which they can take whenever they want during the year.
“What we’re hoping for is that more people will come out next Friday, to cover the extra costs. But because things are so tight here right now, and people don’t seem to be coming out, it’s a storm. perfect.
“We’re a hospitality business and we can’t just close up shop – so we have to take it on the chin.
“A couple of cafes in my hometown here have recently closed because things are just too tight. I know a lot of publicans who are really struggling right now, because of the schedules and everything is bad, and you can’t it’s not enough to continue to increase the price of a meal or a bed. So each time, the margins are reduced.”
Lisa Mackay, whose company HRToolkit has 320 clients in New Zealand, agrees Matariki’s holiday should replace another statistics holiday (she would happily lose the Queen’s birthday) rather than add to the burden on small businesses.
She was one of the few people to oppose an additional public holiday, in submissions to a committee of MPs reviewing the bill.
“Although I support the celebration of Matariki, I do not agree with it becoming an additional public holiday,” she argued. “This is another significant cost to businesses, especially at a time when many businesses are already struggling to cope with significantly rising costs. The hidden costs of ACC, annual leave , sick leave, KiwiSaver and statutory holidays already amount to 21% on and above the hourly rate of pay.
“The minimum wage has increased by 13%, an additional right to five days of sick leave has appeared, extended bereavement leave, in addition to dealing with all the Covid problems. It is very likely that the number of layoffs will start to increase due to Covid, especially with the latest lockdowns, and adding additional costs to businesses will only increase this.”
Now she has several clients looking to liquidate their businesses as regulatory costs have become unmanageable. Among them is a consulting firm made up of four partners. “They got together 10 or 15 years ago,” she says. “Now they say, well, we’ve developed the practice, but actually, we’d better get rid of the staff and go on our own.”
“Another is a physiotherapy business that opened just before Covid. They fought really hard to get there, and they went, ‘I don’t see this getting better. And I’m banging my head on a Brick wall’.
“My experience is that employers were desperately trying to do the right thing by staff, via Covid. But it was their own mortgages at stake.
“For my small business, I had up to seven employees. But if I went to the bank to borrow. I couldn’t borrow against the business. Even though I had a good solid turnover and regular, I had to borrow against my house.
“There’s got to come a time when you’re just going, well, how much more money can we throw into this particular sinkhole? When I’m not making much out of it myself? The average income of a homeowner small business is around $50,000.”
She says some so-called casual workers have regular days, so they should be paid. But for the “true casuals,” they weren’t guaranteed that day’s pay, she says, “so they didn’t miss out because they’re casuals.”
“For those who have regular days, they should get paid for the day. That’s the current model. I admit, I know a lot of business owners get it wrong. They don’t really understand what the casual..
“I would much rather we went to the UK system, where they have 28 days off a year, but that includes days off, so there is no discrimination for anyone working part-time, they have 28 days pro rata.”
Payroll systems are “always a nightmare,” she says, and companies won’t know how their systems have handled the extra vacation until they try to reconcile pay and the next week’s time off.