The Royal Wedding last year caused chaos for small business employers who hadn't prepared for the extra bank holiday and this year's public holiday in June for the Queen's Diamond Jubilee is set to do the same if you don't start thinking about it now.

In the UK there are typically eight bank holidays; New Year's Day, Good Friday, Easter Monday, May Day, Spring Bank Holiday, Summer Bank Holiday, Christmas Day and Boxing Day.

However, in 2012, there is a special bank holiday to celebrate 50 years of the Queen's reign.

The late May bank holiday will be moved to Monday 4 June 2012 and an additional Diamond Jubilee bank holiday will be on Tuesday 5 June 2012.

What an employer should do in relation to allowing time off on the day of the Diamond Jubilee depends on the contractual provisions within an individual's contract of employment.

Given that, under the Working Time Regulations, all employees are entitled 28 days holiday (or the appropriate proportion of this for part time workers) this additional holiday should not affect the legal minimum entitlement for most employers.

If employers have genuine business reasons for requiring staff to work on that day, the time off may not be possible, however, in that situation, employers will need clear contractual provision to require employees to work on bank or public holidays. Without this provision, it will only be possible for employers to get their employees to work with their express consent.

In relation to the question of payment, whilst many employers may be happy to give staff the day off with their normal pay, this is not a statutory obligation and, for many employers, incurring the extra cost of payment for this day may be something they will wish to avoid.

Therefore, employers are, subject to their contracts of employment, free to choose whether any payment should be made for this day.

This decision will obviously need to balance the benefits of making a payment of normal wages as an extra reward to employees against the cost of doing so and the potential negative employee reaction that will inevitably result if no payment is made.

Where employees normally work on bank holidays then their pay for the day will also depend on their contract. As there is also no statutory right to be paid overtime premium or to be given time off in lieu on such days, payments for all employees that work on 5 June should be determined in advance of the day in question to avoid any subsequent uncertainty, either in line with their existing contracts or through a separate agreement.