What is a close down period?
Close Down Period (definition)
Some companies may stop business during a specified period, requiring employees to take leave. Close downs are particularly common over the Christmas and New Year's Eve period and an important part of leave management. They can affect the entire organisation or only a particular group of employees. Depending on their circumstance, an employee must take either paid or unpaid leave during the Close Down Period.
Employees who have been employed for at least 12 months can use Annual Leave if they have enough due. Another alternative is for annual leave to be taken in advance if the employer is happy with this. Employees who have been employed for more than 12 months can take Unpaid Leave if they don’t have enough Annual Leave Due at the start of the close down or the employer doesn’t want them to take leave in advance.
Employees who have been employed for less than 12 months won’t have any Current Leave Due. For employees in this situation, MBIE changed their close down advice and suggest employees should be paid out their Holiday Pay Due balance and their leave anniversary changed to the date the closedown began (or just before if this would avoid having a different date for annual leave entitlements each year).
Public Holidays are processed like normal in payroll when they occur during a Close Down Period. Refer to the Otherwise Working Day definition to learn more.