Public Holidays

 

There are two types of holiday – Christmas and New Year, and all other Public Holidays.


This section has information on how the rules apply to the two different groups of public holidays.

General entitlements

Working on a Public Holiday

Public Holidays payment

Alternative holidays (days in lieu) for employees who work on public holidays payment

Entitlements for employees working shifts or on call

Entitlements for employees working shifts that cross midnight

Calculating payment for public holidays – “relevant daily pay" time and a half payment for time worked

Time and a half payment for time worked

 

Public Holidays – General entitlements  

 

 

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All employees are entitled to a paid day off on a public holiday if it would otherwise be a working day for them (see below “Examples: “otherwise a working day”).

These public holidays are separate from and additional to annual holidays.

 

 

 

Which days are Public Holidays?

 

The Holidays Act 2003 made some adjustments to previous entitlements to public holidays. There are now only two groups of holidays, with slightly differing entitlements applying to each:

  • Christmas and New Year: Christmas Day (25 December), Boxing Day (26 December), New Year's Day and the day after (1 and 2 January)
 
  • All other holidays: Waitangi Day (6 February), Good Friday and Easter Monday (dates variable), ANZAC Day (25 April), Queen's Birthday (first Monday in June), Labour Day (fourth Monday in October) and Provincial Anniversary Day (date determined locally).

The public holidays over the Christmas and New Year period continue to have special arrangements, but the Holidays Act 2003 changes the previous arrangement that deemed these holidays to be celebrated on Monday and Tuesday if they fell at a weekend. From Christmas 2004:
 

  • If the holiday falls on a weekend, and your employee doesn't normally work on the weekend, the holiday is transferred to the following Monday or Tuesday so that the employee still gets a paid day off if they usually work those days.
 
  • If the holiday falls on a Saturday or Sunday and the employee normally works on that day, then the holiday remains at the traditional day and the employee is entitled to that day off on pay.

An employee cannot be entitled to more than four public holidays over the Christmas and New Year period, regardless of his or her work pattern.

All other public holidays are celebrated on the day on which they fall. In years where Waitangi Day (6 February) or Anzac Day (25 April) fall at the weekend, employees who do not normally work on the weekend have no entitlement to payment for the day.

In light of a recent Supreme Court decision, an employer and employee cannot agree to transfer a public holiday from the day listed in the Act to another day.

However, as an exception to the above, the Holidays Act, as amended by the Holidays (Transfer of Public Holidays) Amendment Act 2008 allows employees working shifts that start and end on different days to transfer the public holiday, by agreement with their employer, so that the public holiday covers one whole shift. It is important to note that the transfer can only take place if certain requirements are met, such as that the employee is due to work a shift in the period to which the public holiday is transferred.

 

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Taking a Public Holiday


The concept of what would otherwise be a working day is key to determining an employee's entitlement regarding public holidays.

In most cases whether a day would otherwise be a working day is clear because the working week or roster is constant and both the employer and employee can understand and agree about whether the employee would otherwise work on the day.

Where the employer and the employee cannot agree whether a day would otherwise be a working day they should consider the following issues:

  • what the Employment Agreement says

  • the employee's usual work patterns

  • the employer's rosters or other similar systems

  • the reasonable expectations of the employer and employee as to

  • whether the employee would work on the day concerned.

  • whether the employee works for the employer only when work is available

  • any other relevant factors.

Examples: “Otherwise a working day”

  • If a part-time employee normally works four hours each day on Tuesday and Wednesday and normally works eight hours on Friday, then the employee would be given Good Friday off with eight hours' pay, but would not be entitled to pay for Easter Monday.
  • An employee's roster requires three 10-hour days on Monday to Wednesday one week (week one) and the same hours on Thursday to Saturday the next week (week two).

 

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If week one coincides with the week in which Good Friday falls then this worker will not get paid for Good Friday or Easter Monday (that will fall in week two) because they would not have been scheduled to work on that Friday or Monday.

 

If, however, week two coincides with Good Friday then the worker will be entitled to a holiday on pay for both Good Friday and Easter Monday.

If the employer and employee are unable to reach agreement, one of our Professional Employment Consultants has the power to determine the matter taking into consideration the same issues.

When can an employee be required to work on a public holiday

An employer may require an employee to work on a public holiday when:

  • the public holiday falls on a day the employee would otherwise have worked, and
  • the employee's employment agreement specifies that the employee may be required to work on the holiday.

Transitional arrangements for current “days in lieu”

As of 1 April 2004, any “days in lieu” owed to the employee for working on earlier public holidays became “alternative holiday” entitlements under the new Holidays Act. All of the rules about alternative holidays will apply to these ‘days in lieu' as if they were in place when the entitlement arose.

If you are in any doubt, or if the matter you are dealing with is a complicated one, you should talk to one of our Professional Employment Consultants.

Working on a Public Holiday under the Holidays Act 2003

    
An employee is entitled to at least time and a half for the work that they are required to do on a public holiday. It doesn't matter whether the employee is paid on a salary, wage, or piece rate basis.

If the day would otherwise be a working day (the employee normally works on the day that the public holiday falls) the employee will also be entitled to an alternative holiday on pay (previously known as a day in lieu.
 

How do you pay time and a half where the employees are paid on a piece rate basis?

 

The Holidays Act provides that an employee is to be paid at least time and a half of their relevant daily pay that relates to the time actually worked. For an employer who pays by the piece, the best way to do this is determine how much the employee actually earned on the straight piece rate for the day and then add half that rate again.

 

For example, if an employee earns $25 per bin of apples they pick and on a public holiday they pick 10 bins, at the end of the day that employee would have earned $250. Because the day is a public holiday, the employee will be entitled to half that rate again – an extra $125 - making a total for the day of $375.

 

What if an employer already pays a penal rate in recognition that it is a Public Holiday or a particular day of the week?

To work out what an employee should be paid it is necessary to compare the time and a half required by the Holidays Act 2003 (as amended in October 2004) and what the Employment Agreement requires. The employee is entitled to the greater of:

  • the relevant daily pay less any penal rates, plus half that amount again; or
  • the relevant daily pay, which includes any penal rates, under their employment agreement.
Penal rates are amounts payable for working on a particular day (usually a Saturday or Sunday) or on a public holiday.

For example, an employer pays $25 per bin of apples, plus $100 extra for working on a public holiday. If the employee picks 10 bins:
  • their relevant daily pay less the penal payment plus half that amount again would be $375
          ($25 x 10 = $250 x 1.5 = $375)
  • their relevant daily pay pay including the penal rate would be $350
          ($25 x 10 = $250 + $100 = $350)
The employer must therefore pay the employee $375 because this is the greater amount.

When is an employee entitled to an alternative holiday?


An employee will be entitled to an alternative holiday where they can show that that day would otherwise have been a working day for them. The question to ask is would the employee have worked on that day anyway?

The Act does give some guidance to employers as to what to look at to see if the employee would have worked on that day anyway, such as:
  • the Employment Agreement
  • the employee's working patterns
  • whether the employee works for the employer only when work is available
  • the employer's rosters or other similar systems
  • the reasonable expectations of the employer and employee that the employee would work on the day concerned.
For example, if the employee had worked for the previous three Fridays before Good Friday with the same employer, and they were expected to work on Good Friday as well, Friday is likely to be an otherwise working day for that employee. Because of this, if that employee is required to work on Good Friday, they will be entitled to an alternative holiday as well as time and a half for the work that they do on the day.

If, however, the employee did not usually work Fridays and it was agreed they would work on Good Friday they would not be entitled to an alternative holiday for working on Good Friday (but they would be entitled to time and a half payment for the work done).

If the issue is too difficult for the employer and employee to determine themselves, contact one of our Professional Employment Consultants.
 

What happens when the Public Holiday falls at a weekend?

 

Public holidays that fall at the weekend are treated in two ways:

  • Christmas and New Year holidays are “mondayised” (i.e. shifted to the following Monday or Tuesday) for those who do not normally work at the weekend, but are celebrated at the weekend by those that do. However, no employee is entitled to more than four days worth of public holiday payments for these holidays
  • ANZAC Day and Waitangi Day are celebrated on the day they fall, so only those working on the weekend are covered by the public holiday provisions.

What happens if an employee schedules themselves to work on the Public Holiday?


In circumstances where the employee manages their own work times – say where work is delivered and collected weekly – and a public holiday occurs, the employer and employee should clarify prior to the holiday whether the work will be undertaken on the public holiday. The adequacy of the time available to undertake the work, and the employee's normal working patterns should be taken into account.

 

Public Holidays - payment


The payment that an employee receives for a public holiday depends on the following factors:
  • would the employee have normally worked on the public holiday?;
  • what would the employee normally have been paid for that day?; and
  • does the employee actually work on the public holiday?

Payment for Public Holidays – where an employee does not work


If an employee has a day off on a public holidays they are paid for that day if it is “otherwise a working day”.

The employee is paid as if she or he had worked as normal on the day For employees working a regular pattern of hours the pay cycle continues unchanged.

The employee is not entitled to the payment of at least time and a half which the Act requires to be paid to employees who work on the public holiday.

An employee who does not normally work on the day in question and who does not work is not entitled to a payment for the day. For example, a part-time employee who never works Friday has no entitlement to a payment for Good Friday.

Payment for Public Holidays – where an employee works


If an employee works on any public holiday, that work now attracts payment of at least time and a half for the time they actually work on a public holiday. Such an employee is entitled to the greater of:
  • relevant daily pay less any penal rates plus half that amount again, or
  • relevant daily pay including any penal rates
Penal rates are additional amounts in an employment agreement to compensate an employee working on a particular day of the week (usually Saturdays or Sundays) or a public holiday.

Where the employee is working a shift that includes some time on the public holiday, only the time actually worked on the public holiday attracts payment of at least time and a half: the balance of the time worked may be paid at the normal rate of pay.

Where the person is specifically employed only to work on public holidays (for example, an employee who is only employed to work at the racetrack for the Waitangi Day meeting), they must still be paid at least time and a half.

Some Employment Agreements specify a salary rate with unspecified hours or patterns of work, or set specific wage rates for public holidays. Employees on such agreements must be paid at least time and a half if they work on a public holiday.

Alternative holidays (days in lieu) for employees who work on Public Holidays


If an employee is required to work on a public holiday, and it would otherwise be a working day for the employee they are entitled to a whole day's alternative holiday at a later stage.

Unlike the previous legislation, the entitlement to an alternative holiday applies consistently to all public holidays including ANZAC Day and Waitangi Day.

This provision includes employees working shifts and some employees on call. Both types of employees get a full day off later, even if they only work for a small part of the public holiday.
 

Where an alternative holiday does not apply


Where an employee:
  • works on a public holiday that is not otherwise a working day
  • is on call on a public holiday but is not required to restrict their activities
  • is only employed to work on public holidays
  • is scheduled to work on a public holiday but is unable to work because of sickness or a bereavement
There is no entitlement to an alternative holiday.
 

Payment for alternative holidays


The alternative holiday can be taken at any time mutually agreeable to the employer and employee, and is paid at the employee's relevant daily pay for the day taken off.

Fourteen days notice must be given when an employee is taking an alternative holiday.

If the employer and employee cannot agree, the alternative holiday may be taken at a time determined by the employee, having regard to the employer's view of what is convenient.

If the alternative holiday is not taken within 12 months of it accruing, the employer can direct the employee to take the alternative holiday. Alternatively at that time the employee may ask the employer to make a payment instead of having the holiday off. If the employer agrees to make a payment the level of payment is a matter of agreement between the employer and employee.

If any alternative holidays are outstanding at the time of resignation or termination, these are paid out at the rate of pay for the employee's last day of work, i.e. their relevant daily pay.

Transitional arrangements for current “days in lieu”

As of 1 April 2004, any “days in lieu” owed to the employee for working on earlier public holidays became “alternative holiday” entitlements under the Holidays Act 2003. All of the rules about alternative holidays will apply to these ‘days in lieu' as if they were in place when the entitlement arose.

If you require further advice in this area, please contact one of our Professional Employment Consultants.

Public Holidays - entitlements for employees working shifts or on call  

The Holidays Act 2003 addresses the public holiday entitlements for employees in a number of work patterns, including:
  • employees working shifts
  • employees on call

Employees working shifts are entitled to no less than:

  • Their relevant daily pay for their normal rostered shift when they take a public holiday as a day off work - see factsheet titled Calculating payment for public holidays – “relevant daily pay”
  • At least time and a half payment for hours worked on the public holiday, plus an alternative holiday for each public holiday or part of a public holiday the shift covers. For example:

    1. An employee starts at 10 p.m on Christmas Day and ceases work at 6 a.m. on Boxing Day. The employee is entitled to eight hours' pay of at least time and a half and two alternative paid holidays (one each for Christmas and Boxing Day).

    2. An employee works from 10 p.m. on Christmas Eve until 6 a.m. on Christmas morning. The employee works the same shift beginning on Christmas night, finishing on the morning of Boxing Day. The employee is entitled to two hours' pay at the relevant rate in their employment agreement and six hours of at least time and a half for the first shift; to eight hours of at least time and a half for the second shift; and to two alternative paid holidays off (one each for Christmas Day and Boxing Day).
 
 
  • An employee working an eight-hour shift starting on ANZAC Day at 10 p.m. is entitled to two hours' pay of at least time and a half, six hours' pay at the relevant rate in their Employment Agreement, plus a full day's alternative paid holiday off.

Employees on call on Public Holidays have different entitlements depending on the nature of the call-out arrangement:

  • If the employee is called out, he or she is entitled to at least time and a half for the time worked, plus a full day's paid alternative holiday (if it would otherwise have been a working day).
  • If the employee is required to restrict activities on the day to the extent that they have not enjoyed a full holiday – for example, if the employee is required to stay at home all day – but is not called out, then the employee is entitled to a full day's paid alternative holiday (if it would otherwise have been a working day).
  • If the employee is on call, but is not required to restrict activities – for example, if the employee can choose not to accept the call-out – then entitlement to an alternative paid holiday would arise only if the employee accepts a call-out and the day would otherwise have been a working day for the employee.
  • If the day would otherwise be a working day for the employee, and they do not get called into work, they are entitled to relevant daily pay for the day. Any agreement for being on call would depend on the Employment Agreement.
Rights to an alternative holiday do not apply where the person called out has an employment relationship with the employer only on public holidays.

Transferring Public Holidays – entitlements for employees working shifts that cross midnight

    
Enjoying public holidays can be difficult for employees who work shifts that start on one calendar day and end on the next calendar day (as the public holiday runs from midnight to midnight).

The Holidays (Transfer of Public Holidays) Amendment Act 2008 amended the Holidays Act 2003 to allow employees working night shifts that start or end on a public holiday to transfer the public holiday, by agreement with their employer, so that the public holiday covers one whole shift. It is important to note that the transfer can only take place if the employee is due to work a shift in the period to which the public holiday is transferred.

The agreement to transfer the public holiday must be in writing so that both employee and employer are clear about their public holiday arrangements. The agreement cannot reduce the number of public holidays that the employee would have been entitled to had the holiday not been transferred, and the traditional holiday been celebrated.

If there is agreement to transfer a public holiday, it is good practice to include this agreement in your Employment Agreement.
 

How does the transfer agreement work?


Where an employee’s shift starts on one calendar day and ends on the next calendar day and one of those days is a public holiday, an employer and employee can enter into an agreement to transfer the public holiday to a 24 hour period that begins or ends on the public holiday, if the employee is due to work a shift in that 24 hour period.

Example 1

An employee is scheduled to work from 10 pm on 26 October 2008 to 6 am on 27 October 2008 (shift A). The 27th of October 2008 is a public holiday (Labour Day). The person is also scheduled to work the same shift beginning on Labour Day, finishing on the morning of 28 October (shift B). The employer and employee may agree that Labour Day for that employee will run from midday on 26 October to midday on 27 October. This means that the employee’s Labour Day will cover the whole of shift A and will not cover any part of shift B.

If the employee works shift A they will be entitled to at least time and a half payment for the hours worked, plus an alternative holiday.

If the employee does not work shift A they will be entitled to their relevant daily pay for the shift.

Shift B will not attract any public holiday entitlements, because the employee’s Labour Day does not cover any part of shift B.
 

How does the transfer agreement work where an employee’s shift overlaps two Public Holidays?


Where there are two public holidays in a row, and an employee’s shift overlaps both public holidays, an employer and employee can agree that two separate periods of 24 hours are to be treated as public holidays if each 24 hour period starts or finishes during those public holidays, and the employee is due to work a shift in each of those 24 hour periods (note that the employee and employer could also agree to transfer just one of the public holidays, rather than both).

Example 2

An employee is scheduled to work from 10 pm on 24 December to 6 am on Christmas Day (shift 1), 10 pm on Christmas Day to 6 am on Boxing Day (shift 2), and 10 pm on Boxing Day to 6 am on 27 December (shift 3). The employer and employee can agree that Christmas Day for the employee will run from midday on 25 December to midday on 26 December, and that Boxing Day for the employee will run from midday 26 December to midday 27 December. This means that the employee’s Christmas Day will cover shift 2, and the employee’s Boxing Day will cover shift 3.  The employee’s Christmas Day will not cover any part of shift 1.

If the employee works both shift 2 and shift 3, they will be entitled to at least time and a half payment for hours worked, and two alternative holidays off.

If the employee does not work either shift 2 or 3 they will be entitled to their relevant daily pay for both shifts.

If the employee works shift 2 but not shift 3, they will be entitled to time and half payment for shift 2, an alternative holiday for shift 2, and relevant daily pay for shift 3.

Shift 1 will not attract any public holiday entitlements, because the employee’s Christmas Day does not cover any part of shift 1.

What if provisions like these are already in my Employment Agreement?


Existing provisions in Employment Agreements to transfer public holidays can be applied if they meet the rules set out above – for example, the employee’s whole shift is in the 24 hour period to which the public holiday is transferred, and the 24 hour period starts or ends on the traditional public holiday.

If you are in any doubt, or if the matter you are dealing with is a complicated one, you should talk to one of our Professional Employment Consultants.

Calculating payment for Public Holidays - “relevant daily pay”


Relevant daily pay is used to calculate payment for public holidays and alternative holidays. Relevant daily pay reflects what the employee would have been paid if they had worked on the day in question.

1. In many cases it will be clear what payment the employee would otherwise have earned on the day – if this is the case, then that amount should be used as relevant daily pay. Any such calculation must include:
  • productivity or incentives payments, including commission, if those payments would have been received had the employee worked
  • overtime payments
  • the cash value of board and lodgings provided.
The calculation must exclude any payment of any employer contribution to a superannuation scheme for the benefit of the employee.

If relevant daily pay is being determined for a public holiday, the amount does not include additional amounts added because of the requirement to pay time and a half.

2. In cases where this amount is not clear the payment is an average one calculated by dividing the employee's gross earnings for either:
  • the four weeks before the end of the pay period immediately before the holiday or leave, or
  • where the pay period is longer than four weeks, the pay period before the calculation
  • by the number of whole or part days the employee either worked or was on paid leave or holiday during that period.
3. Employment agreements may specify a rate of relevant daily pay, but only if that rate is greater than or equal to the rate determined according to (1) or (2) above.

We can assist in helping you work out these calculations, please contact one of our Professional Employment Consultants.

Public Holidays - at least time and a half payment for time worked


Under the Holidays Act, as amended in October 2004, if an employee works on any public holiday, that work now attracts a minimum payment of time and a half for the time they actually work on a public holiday. Employment Agreements, however, may already provide for time and a half or better (see below)

To work out what an employee should be paid, it is necessary to compare the time and a half required by the Holidays Act 2003 (as amended in October 2004) and what the employment agreement requires. The employee is entitled to the greater of:
  • their relevant daily pay less any penal rates, plus half that amount again; or
  • their relevant daily pay, which includes any penal rates, under their Employment Agreement.
Penal rates are amounts payable for working on a particular day (usually a Saturday or Sunday) or on a public holiday.

The implications for Employment Agreements


Employment agreements must specifically provide that an employee will receive at least time and a half for working on a public holiday. This applies to all employees, including salaried employees.

Ideally employers and employees will have reviewed and agreed on amendments to Employment Agreements before the Holidays Act 2003 came into force on 1 April 2004 , in order to provide certainty for the employer and the employee.

If this has not occurred the agreement must be amended to state the right to time and a half at the earlier of the next re-negotiation, or within 12 months of the Act coming into force.

If, however, an employee's regular pay already includes time and a half or better, there is a longer period for amending the agreement (see "The transitional provisions for existing Employment Agreements" below).

New Employment Agreements need to specifically provide that an employee will receive at least time and a half for working on a public holiday.
 

Example of required clause:


“If the employee works on a public holiday they will be paid at the rate of time and a half for hours worked as set out in section 50 of the Holidays Act 2003.”

An Employment Agreement cannot in future specify that the rate of pay already includes a component for time and a half (except in the transitional provision mentioned below).

Time and a half is applied to the portion of the employee's relevant daily pay, less penal rates, for the time that the employee actually works.
 

Examples: What time and a half means in practice


In most cases, what time and a half means will be easy to identify. For example, if the employee is paid an hourly rate, then he or she is entitled to one-and-a-half times that rate for the time worked on a public holiday, as in the following clause:

“The pay rate for this position is $12 per hour. For time worked on a public holiday, the pay rate is $18 per hour (time and a half).”

In other cases there are a number of ways this can be done appropriately, depending on the wishes of the employer and employee. This may be a day rate, part day rate or hourly rate. The basis on which time and a half is calculated should ideally be included in the employee's Employment Agreement, if they are likely to work on a public holiday.

For example, if a salaried employee has regular hours of work, then the relevant daily pay can be calculated by dividing the annual salary by 52 removed “to identify ordinary weekly pay” and then by the number of days worked per week to identify the relevant daily pay.

The amount of the time and a half payment should then be based on the portion of the normal day that the employee actually works.

For example, for an employee whose salary is $40,000 per annum, and who normally works five eight-hour days per week:
  • weekly pay is $769.23.
  • the relevant daily pay is $153.85 (weekly pay divided by five)
  • time and a half the relevant daily pay is $230.78, if the employee works 8 hours on the public holiday.
The employee would be paid for the time actually worked on the basis of this amount. For example, if the above employee work half a day, they would need to be paid $115.39 (half of $230.78).

Where it is difficult to tell what an employee's time and a half rate would be, one of our Professional Employment Consultants would be able to assist.
 

Examples: Where an Employment Agreement provides for penal rates

 

Double time in agreement

An employee is paid $10 an hour for normal working hours. The employment agreement, however, provides for double time (an extra $10 per hour making $20 per hour in total) for working on Sundays.  Anzac Day falls on a Sunday and the employee works eight hours. Relevant daily pay will therefore be $20 X 8 = $160.

The employee will be entitled to the greater of:

    * relevant daily pay ($160) less any penal rates
      (the extra $10 x 8 =$80),
      plus half that amount again (an extra $40):
      $160 - $80 + $40 = $120
      OR

    * relevant daily pay = $160

The Employment Agreement is better than the minimum required by the Holidays Act 2003 so the employee is entitled to $160

Time and a quarter in agreement

An employee is paid $10 an hour for normal working hours. The Employment Agreement, however, provides for time and a quarter for working on Saturdays (an extra $2.50 per hour making $12.50 in total). Anzac Day falls on a Saturday and the employee works eight hours on that day at the time and a quarter rate. Relevant daily pay will therefore be $12.50 x 8 = $100.

The employee is entitled to the greater of:
  • relevant daily pay ($100) less any penal rates
    (the extra $2.50 x 8 = $20),
    plus half that amount again (an extra $40):
    $100 - $20 + $40 = $120   
      OR
  • relevant daily pay = $100
The Employment Agreement is inferior to the minimum required by the Holidays Act 2003 so the employee is entitled to $120 - the time and a quarter rate is effectively topped up to time and a half.
 

The transitional provisions for existing Employment Agreements


Where an employee's normal rate already included provision for at least time and a half for public holidays (e.g. a composite rate) at 1 April 2004, that arrangement can stay in place:
  •  for collective Employment Agreements, until the later of 1 April 2007 or when a replacement collective agreement comes in force.
This applies where the amount has been genuinely negotiated, and the amount can be shown to meet the requirement to pay at least time and a half for working on a public holiday.

If there is a dispute over whether the rate does or does not include a provision for time and a half for working on a public holiday, a Labour Inspector can determine the matter for the parties.

Note that after the transitional period expires, every employment agreement will need to specifically provide that an employee will receive time and a half for working on a public holiday. If a composite rate remains after that date, the employee will be entitled to one-and-a-half-times this rate for the time worked on the public holiday.

If you are in any doubt, or if the matter you are dealing with is a complicated one, you should talk to one of our Professional Employment Consultants.




 



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