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Is Extra 'Holiday Pay' Legally Required?

By Andrew Lu | Last updated on

Last Updated: December 18, 2019

The holiday shopping season has grown ever longer, as more retailers are now open prior to Black Friday on Thanksgiving Day itself. If you're a store owner, are you legally required to pay overtime or premium "holiday" pay?

The short answer is "no." In general, private employers are not required by law to pay a special wage for work over the holidays. However, some exceptions may apply.

Under federal law, there is no special overtime rate for work performed over the holidays. This means that as a private employer, you can require that your employees work on Thanksgiving, Christmas, New Year or any other day while paying the same rate as you would any normal workday.

However, if your workers are covered by a collective bargaining agreement or have individual employment contracts, you would have to comply with the terms of those agreements.

Often a collective bargaining agreement will dictate the work calendar. Workers can typically refuse to work on days not set forth in the calendar, or receive a predetermined higher wage for work performed on those days. This may explain the common misperception that every employee must be paid special wages for work performed on holidays.

Such agreements can be complicated, so If you're planning to be open for business on a holiday and you're unsure about what your labor agreement requires, you may want to contact an employment attorney to address any potential legal issues.

Still, just because holiday pay may not be legally required for most employers, you may want to consider other, non-legal factors before paying your workers minimum wage for working on Thanksgiving. Staff morale and loyalty are just a few. So you may want to consider paying more as a reward or bonus for workers who sacrifice their family time to help out your business.

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