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With the Irregular Work Pattern calculation, what happens in the event of partial days. For example, if the employee has worked 25.5 days, do I divide the gross by 25.5 days, or by 26 days? How can I enter a part day for the calculation, such as 25.5?
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| This question was recently asked of us by a client who had been told by their employment lawyer that the gross should be divided by 25.5 days. Our understanding
of the legislation is that if an employee works any time on a day, it is counted as one whole day for the Irregular Work Pattern calculation.
The client then contacted the Employment Relations Service for clarification.
The question as asked by the client was
If an employee works an irregular work pattern and has a day off sick, please can you confirm the calculation of their relevant daily pay from the following information: -
| Date | Gross | Days | | 01/05/05 | $1,308.71 | 7 | | 08/05/05 | $1,189.50 | 6.5 | | 15/05/05 | $1,053.00 | 6 |
| 22/05/05 | $936.00 | 6 | | Total | $4,487.21 | 25.5 |
Should the RELEVANT DAILY PAY be divisable over 25.5 days or 26 days??
The legislation clearly states in Section 9 (3) b, division 'is the number of whole or part days during which the employee earned those earnings in the 4 calendar weeks, ...'
Our company operates the ACE Payroll system for payment of our clients wages and the system only allows for division under IRREGULAR WORK PATTERN in whole days, not part days. Their interpretation of the legislation is that even if a person
only works for one hour on a day, it should be counted as a full day for purposes of calculating their RELEVANT DAILY PAY.
Could you please clarify what the legislation's intention is and reply in writing to my question?
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The Employment Relations Service then replied back to our client with the following answer
The Act does not allow for days to be divided into smaller units, therefore if an employee works a part day that is considered to be a whole day for the purposes of the formula for calculating relevant daily pay. Based on the information you
have provided in your email, the employee's total gross earnings should be divided by 26 days being the number of whole or part days during which the employee earned those earnings in the 4 calendar weeks before the end of the pay period immediately
before the calculation is made.
Anne Naganathan
Information Officer
Employment Relations Service
Department of Labour
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Conclusion
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When working out the relevant daily pay by using the Irregular Work Pattern, you divide the gross by the number of whole or part days worked during the period.
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While the wording of the Act is possibly not the best, what it is saying is that you count each part or whole day they worked, and the total days worked is the number you divide the gross by.
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You do NOT use a fraction or a decimal when performing the calculation - every day worked counts as one day, regardless of the number of hours worked.
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52 week history not required
Holiday pay entitlements
Holidays Act 2003