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Are you required to pay employees for a shut-down period?

by , 27 November 2013
Temporarily closing your business during slow business periods like Christmas, New Year or during school holidays is called a shut-down period. If you're having a shut-down period this December, read on to find out whether or not you're required to pay your employees during this time...

Don't know whether or not you're required to pay your employees for a shut-down period?

Don't fret, the Practical Guide to Human Resource Management has you covered.

Here's what the law says about shut-down periods and payments

Let's say your company closes from 15 December to 15 January. The question is: Must you pay your employees for that period or is it unpaid leave?

Answer: Payment will depend on the following factors:

  • What you've agreed on with your employees
  • Whether or not there's a collective agreement or sectoral determination that applies to your employment relationships and specifies the terms applicable to a shutdown period.

In some industries (like construction) employees are required to take their annual leave during the shutdown period.

If employees don't have annual leave to their credit, then the days during the shutdown period are unpaid.

Keep in mind that if you don't have specific arrangements regulating shutdown periods, you can't impose a shutdown period and force employees to take unpaid leave.

Overall, shut-down periods depend and payment terms depend on what you've agreed with your employees.

Now that you know what the law says about shut-down periods, make sure you comply.

 

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