Do I Have to Pay Employees for Holidays?

By Katherine Muniz
August 8, 2016

When it comes to holiday time off, it seems like the rumor mill never stops spinning. Depending on who you ask, you’ll get different intel. “For federal holidays we get time off,” one colleague might say. “But do we get paid?” another asks. That same source might reply “Yes and I think it’s overtime.” But what’s the truth?  Here are the facts according to the law.

Which holidays do employees have off?

None, technically! Federal law does not require private employers to provide employees with time off on holidays (even federally recognized holidays), whether it be Thanksgiving, Christmas, or New Year’s. The law views holidays as regular workdays, but many employers provide holiday time off as an employee benefit in order to improve morale and maintain a competitive company culture.

How is holiday time off paid?

>According to the Department of Labor, the Fair Labor Standards Act (FLSA) does not require payment for time not worked, including vacations and holidays. The FLSA comments, “These benefits are generally a matter of agreement between an employer and an employee (or the employee’s representative).” Translation: employers are not required to pay for time off on holidays.

Do employees who work on holidays earn overtime?

There is no law that says employees must be paid extra for working on a holiday. In practice, some employer does provide overtime pay as an employee benefit. However, according to the FLSA’s overtime stipulations, “The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest unless overtime is worked on such days.”

Employment contracts

If paid time off has been established in an employee agreement, it must be upheld. On another note, if an employer has made such a policy, it is recommended that they apply the policy to all employees of the same classification in order to avoid a potential discrimination lawsuit.

Legal holidays for government employees

Public sector employees are designated 10 legal and paid holidays under federal law in Title 5 of the United States Code (USC). These holidays include:

  • New Year’s Day
  • Martin Luther King Day
  • President’s Day
  • Memorial Day
  • Independence Day
  • Labor Day
  • Columbus Day
  • Veteran’s Day
  • Christmas Day

The McNamara-O’Hara Service Contract Act and Davis-Bacon Act also grants holiday privileges to employees working on government contracts.

Management-Side Labor and Employment Lawyer & HR Counselor Charles Krugel says, “These laws relate to federal public sector contractors who are mandated to pay prevailing wage rates pursuant to a federal government contract. In other words, these are federal laws that regulate how much federal contractors & subcontractors, & their employees, are paid (including overtime) & what benefits they receive.”

Contractors working on contracts over $2,500 of certain status may receive holidays and fringe benefits.

State holidays

State and local laws do play a factor in designating time off, and often provide more generous provisions than the Federal version. Take for instance this state statute in New Hampshire mandating that “No employee should be required to work in any mill or factory on any legal holiday” except to the extent it “is both absolutely necessary and can lawfully be performed on the Lord’s Day” (RSA 275:28).

Religious holidays

According to Title VII of the Civil Rights Act of 1964, employers with 15 or more companies are obligated to provide reasonable accommodation for the religious practices of its employees. Covered employers must make accommodations unless they can prove that the accommodation would result in undue hardship for its business. Some state anti-discrimination laws may cover even smaller employers.

Floating holidays

As a solution, many employers have adopted the practice of offering floating holidays, which employees can use to take time off for religious observances throughout the year. Once sector that utilizes floating holidays in particular is retail, knowing the importance of holidays for their business, and offering employees time off on other days to make up for the time spent working on holidays.

While federal law does not order holidays off, paid or unpaid, most employers know the importance of offering time off to employees on major holidays in order to stabilize employee morale. Do you believe in celebrating holidays by offering your employees time off?

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