Are workers entitled to an extra day's pay in a leap year?
There’s an extra day in February this year, but do you need to pay your employees an extra day’s wages? Read on to find out.
We all know the score when it comes to leap years. Once every four years we have an extra day in the calendar, the 29th February—the last one was in 2016, which means we’re due one this year.
While this means business as usual for most of us, employers like you might wonder how this affects employee pay entitlements, and we don’t blame you…
Because if an employee works an extra day this February that they didn’t work in February last year, should you give them an extra day’s pay? Here’s what you need to know:
How to handle leap year wages
Ultimately, your employee’s pay entitlements on 29th February 2020 will depend on whether you pay them an hourly rate or a set salary. Let’s take a look at the difference…
Workers paid an hourly rate
These staff are entitled to be paid for all of the time they work, and this means paying them more if they’ve worked an extra day.
So if your employee earns an hourly rate of pay and, because of the leap year, they work an extra eight hours on 29th February—they’re entitled to an extra eight hour’s pay in their wages.
Put simply? Additional work means additional pay.
On the other hand, employees who receive the same basic pay every month are not entitled to any extra pay, despite potentially working an additional day this year.
This is because they’re paid a set salary for the whole year, and the extra leap year day will have already been factored into their overall earnings.
You’ll only pay salaried staff more on a leap year if there’s a term in their staff contact that explicitly states they get additional pay at this time of year, so make sure to check yours...
Keep an eye on the legal rate
That said, you need to be careful that the extra day doesn’t take your employee’s pay below the minimum legal rate.
Let’s say your employee is a salaried employee on the National Minimum Wage. If they work an extra day in February for no extra money, then their hourly rate drops down, so you need to be careful you don’t underpay them.
Still got a question?
Speak to one of our HR experts today. They’ll give you confidential legal advice on the leap year and employee wages, and they’re available to take your call 24/7. Call today on 1800 279 841.