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The Legalities of Holiday Pay

Posted on 2/23/2018 by Michael Zamora
We have written before about how employers are not required to pay time and a half for holidays. But now that the new year is upon us, this is a good time to review some of the other legalities surrounding holiday pay so that employers are aware of their obligations.

First note that there is no federal law which requires employers to give workers time off for a holiday. Employers are, however, required to provide time off as a religious accommodation if not doing so would infringe upon an employee’s religious practices, as long as doing so would not constitute an undue hardship for the business. Some employers do this by offering a “floating holiday” which can be used for holidays not recognized by your standard schedule. Acceptable accommodations include allowing an employee to take unpaid time off or using vacation time to celebrate a religious holiday.

When it comes to pay, employers do not have to pay non-exempt, or hourly, workers for time that they do not work, including holidays. But for salaried employees, employers must pay the employee’s full weekly salary if the worker was working any other hours during the week in which the holiday falls. Time off for holidays does NOT have to be counted toward an hourly employee’s overtime calculations. This is because paid time off is not considered time worked, and because employees must actually work 40 hours in a week to be considered eligible for overtime.

Also, an employer may attach conditions to holiday pay, such as requiring that a worker have been employed for a certain amount of time or only awarding holiday pay to full-time employees. This is because you are allowed to offer different holiday pay (or no holiday pay at all) to certain groups of employees as long as the differences among them are not based upon membership in a protected class (gender, race, etc.). By familiarizing yourself with the laws surrounding holiday pay, you can establish practices which are not only legal, but which are clear and understood by your employees.

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