Do Companies Have To Provide Holiday Pay?

Millions of U.S. workers look forward to paid holidays. Many even assume they’ll get a paid day off for holidays like Christmas or Thanksgiving, but what does the law say about holiday pay? Do companies have to pay their employees for certain holidays? Does the law require extra pay for workers who take holiday shifts?

We’ll answer these and other questions related to employers’ holiday pay obligations in this article. Specific answers will depend on the details as well as state law, but we’ll cover key legal principles to illustrate the rights and obligations surrounding holiday pay.

If, for whatever reason, you suspect you’ve been denied holiday pay or benefits to which you’re entitled, talk to an employment law attorney licensed in your state. They can help you understand and protect your rights as an employee. They can also provide you with a complete picture of your options, which will likely be more encouraging than you might think.

In the meantime, let’s start with the basics.

What Is Holiday Pay?

Holiday pay refers to employee compensation for certain recognized holidays. It usually takes one of two forms:

• Extra pay: Employees earn a higher rate of pay, such as double their regular rate, for working a holiday
• Paid day off: The employee doesn’t work but still receives pay for the holiday

Some employers combine these approaches. Employees receive a paid day off for the holiday. If they choose or are required to work, they receive their regular pay for their hours worked plus premium holiday pay.

Some companies also offer floating holidays. These are paid days off that employees can use for religious holidays or other personal events.

Paid time off (PTO) is another way companies handle time away from work. PTO can cover vacation time, sick days, and holidays all in one bucket.

Not every company offers PTO or holiday pay, but many offer them as part of their employee benefits package to attract top talent.

Are Companies Required To Offer Holiday Pay?

The short answer is: No, holiday pay is not required. Under federal law, private employers are not required to provide holiday pay. Most private sector employees don’t have a legal right to a paid day off on holidays like Thanksgiving or New Year’s Day.

The Fair Labor Standards Act (FLSA) is the main federal law that covers wages and overtime. It does not require holiday pay. The law only states that non-exempt employees (those entitled to overtime pay) must be paid overtime pay (time-and-a-half) for hours worked over 40 in a workweek. It makes no difference if those hours are on a holiday.

As such, whether you get holiday pay depends on your company’s policy and any relevant contracts. Some private employers opt to offer paid holidays as a way to retain and motivate their employees. Others, especially small businesses, may not.

Are There Different Rules for Federal Workers?

The law requires that federal employees get paid days off for official federal holidays. These include:

• New Year’s Day
• Martin Luther King Jr. Day
• Washington’s Birthday (Presidents Day)
• Memorial Day
• Juneteenth National Independence Day
• Independence Day
• Labor Day
• Columbus Day
• Veterans Day
• Thanksgiving Day
• Christmas Day
• Inauguration Day (for eligible employees working in the Washington, D.C. area)

When one of these days falls on a weekend, the federal government grants employees a paid day off on an adjacent workday. For example, if Independence Day falls on a Saturday, federal employees will likely get a paid day off for the preceding Friday.

Federal employees who work on a designated holiday typically receive their regular pay for hours worked plus holiday premium pay for that day. This is in addition to any other overtime compensation they may earn.

Are There State Law Variations?

Most state laws follow the FLSA and don’t require private employers to offer holiday pay. However, a few states have unique rules. For example, Rhode Island requires employers to pay certain healthcare and retail workers premium pay for holiday shifts.

Massachusetts’ “blue laws” limit when stores can open on Sundays and certain holidays, such as Good Friday. While these laws don’t require holiday pay, they do affect when people work. State laws can and do vary, but most don’t force private employers to provide paid holidays.

What About State Workers?

It depends on state law. State and local governments set their own rules for public employees. Whether nonfederal public employees are entitled to holiday pay depends on state/local law.

For example, Pennsylvania law requires that state employees get paid time off for certain holidays, including Thanksgiving, Veterans Day, and Juneteenth. Many states offer paid holidays that align with federal holidays, but they aren’t required to.

Written Promises

Regardless of whether you work for a public or private employer, written promises about holiday pay can appear in various employment documents. Some of the more common ones include:

• Company policies
• Collective bargaining agreements
• Employment contracts
• Employee handbooks

When they appear in these forms, most states consider these promises to be legally enforceable obligations. Accordingly, they treat breaking these promises as a breach of contract or a violation of wage laws, especially if the promise is clearly communicated to employees.

Holiday Policies

Although paid holidays often aren’t required, many companies choose to offer them. Employee handbooks or larger company policies often include or address their holiday pay policy. This lists the days that are paid holidays, who qualifies for them, and whether workers receive extra pay for holiday work.

For example, a company might say:

• Full-time employees get eight paid holidays per year
• Part-time employees get pro-rated holiday time
• Employees who work on a recognized holiday get premium pay, such as time-and-a-half, double time, or a bonus

If you are represented by a union, holiday benefits might also be in a collective bargaining agreement.

Some companies’ holiday policies might offer floating holidays. This means that employees can choose their own paid days off for events like religious holidays or personal needs. Floating holidays are a flexible way to support diverse workforces.

Which Employees Get Holiday Pay?

It depends on company policy. Most companies’ holiday pay policies apply mainly to full-time employees. Part-time employees may get holiday time, but it’s often less. Some companies calculate holiday pay based on hours worked. Others only give it to employees who work a certain number of hours per week.

Which Holidays Do Companies Recognize?

There’s no set list for recognized holidays. Private employers can pick the holidays for which they want to offer employees paid time off. Many model their list after the federally recognized holidays.

Consult a Local Advocate

If you think your employer hasn’t honored its holiday pay obligations, speak with an experienced employment lawyer. Doing so doesn’t necessarily mean a lawsuit. A strong legal advisor can often help you avoid one. Their duty is to protect your interests.

You’ll share the details with them confidentially so they can present you with your options. They can also help you determine the best course of action. Depending on your potential claims, strict deadlines may apply. It’s a good idea to consult a trusted attorney sooner rather than later.

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Connect with one to ensure you’re making fully informed decisions. An advocate can be your best move at this time.