Updated 6/24/2020 4:05pm
Many companies think they’re required to pay employees on holidays even if they don’t work, or to pay them extra on a holiday they do work.
Required holiday pay is actually a myth: Holiday pay is not legally mandated in the United States. You can set your own policies based on what makes sense for your business.
Of course, paying your employees on holidays boosts morale and retention. Paying staff extra for working holidays is a gesture of kindness to team members who could otherwise be with friends or family. In addition, it enhances your benefits package, creating a tangible competitive advantage over practices that do not offer holiday pay.
What is Holiday Pay?
All employees must be compensated for time worked, but some employers choose to offer holiday pay to employees even if they don’t work on a holiday. In addition, they may pay those employees who do work on a holiday time-and-a-half or double-time. This decision is made at the business level; there are no holiday pay laws requiring you to provide this benefit.
Choosing to implement holiday pay – and how much – can be a complex decision, but here are some suggestions for how to make it simpler.1. What works for your practice may be different from others, so think about questions like:
- Do your employees work longer hours than normal on a holiday?
- Are employees able to choose which holidays they work or are their hours set in stone?
- Do your employees get other time off during the holidays, such as when your entire practice is closed?
Use our handy calendar to make sure you're aware of upcoming 2020 holidays.
2. Consider your business values. If they include ideals like family, teamwork, or work-life balance, it makes sense for your practice to reward employees for their hard work on holidays.
3. We know that you love your employees and want to treat them well, but we also know that the decision of whether or not to offer holiday pay requires rigorous financial analysis. Paying everyone on the holidays can get pricey, so be sure to prioritize your actual required expenses when considering holiday pay.
How Does Holiday Pay Work for Salaried Employees?
You get to decide! Some practices set different policies for exempt, non-exempt, and hourly employees. If you don’t know how to classify your employees, try using this guide. Others practices may choose to offer a consistent compensation plan for everyone. While there are no holiday pay laws, you should make sure your policies are clear to your team.
Informing Your Employees about Holiday Pay Policies
Regardless of what policy you choose, it’s best to be up front about how you handle this benefit. This information should be in your employee handbook with the rest of your payment policies. Check out this primer for how to build an employee handbook beyond holiday pay policies. Remember that if you choose to offer holiday pay, it can improve your benefits package and boost morale. At the same time, there are no holiday pay laws on the books. If you decide holiday pay isn’t right for your practice, that’s ok too.
If you are a current HR for Health client and have additional questions, please reach out to our team by calling 877-779-4747. Please keep in mind that due to an influx in questions related to the COVID-19 outbreak, our response time may be slower than usual but we will get back to you as soon as we can!
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HR for Health is one of the nation’s leading Human Resources Management Systems (HRMS) used by small to mid-sized practices. HR for Health has provided the following complimentary articles to ensure you have a game plan when addressing complex HR matters.
Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health's HR services