What are holiday pay laws? Here’s everything you need to know

For most of us, holidays are considered as the main highlight of the year and most important rights enjoyed by workers. However, the laws about holidays can be confusing. Holiday pay is another type of employee benefit that is offered to employees when the employer wants to retain and recruit the best employees for certain positions. But employers are not bound to provide paid time holidays as these holiday pays is not protected by any law. However, employers are restricted to refrain from discrimination in terms of holiday pay.

Overview of holiday pay law

According to the US federal government laws, there are ten paid holidays annually. However, the policies and mechanisms to utilize within an organization depends on the individual employers

Often employers that provide holiday pay win the talent race against those who are not. This is because the increasing demand for talent in such areas as Advanced HR systems and Artificial Intelligence (AI) are reaching the sky and employers with experiences in their fields always look at both sides of the coin when their expertise is claimed to be delivered in high positions.

Holidays pay overtime
Source: timesheets

The Fair Labor Standards Act (FLSA) mainly does not require payment for the time not worked such as holidays or vacations (federal or state). To be precise, these benefits are a matter of agreement between an employee and an employer.

Who is entitled to get holiday pay?

Some of the businesses like restaurants and organizations like hospitals do not shut their doors even over holidays. This brings us to the question, who gets the holiday pay? Or do part-time employees get holiday pay? A simple and short answer to this is not every employee is entitled to have holiday pay when they are forced to work on Christmas, Thanksgiving, or Easter.

A report from the Bureau of Labor Statistics (BLS) says 73% of the private workers get paid for the holidays and vacation days. It is not uncommon for most employers to provide premium pay to the workers who work on national holidays when most of the employees remain at home. But neither state nor federal laws obligate employers to do so. Most employers don’t think that they would call employers to work on the recognized holidays like Christmas or Thanksgiving as they have to pay them extra hourly wages apart from their monthly pay.

Who is entitled to get holiday pay
Source: jamesmadison

But this doesn’t work every time because the state and federal laws leave it onto the agreement between employers and the employees. Similarly, employers are not forced to provide employees holiday Pay in California along with the other states well according to their employment policy. It is the same case when employees think that they can receive more or deserve more for the work they are currently receiving, no laws restrict the employees to switch for better opportunities or look for better options.

Vacations accrual and caps

Generally, employers provide a ten-day vacation to an employee for the rest of a year when they are hired as a permanent employee, but he or she would be able to accrue them after working for the company for six months. Employees can also be designated as interns or at a waiting period when they begin their employment. This period is often associated with the introductory 90-day period or can be extended by the employer as the first year of the service.

how-to-pay-employees
Source: nydjlive

It’s on the employer’s decree to grant the vacations to a certain group of employees and not to others like managers only or only permanent employees, keeping in mind not to discriminate against them based on characteristics like race and gender for national holiday pay.

Moreover, the employees can work on multiple national holidays which can provide them to earn a significant hourly amount depending on the type of employer.

Overtime pay

As mentioned earlier, that employers are obligated by federal or state law to pay for holiday pay, they are not even required to pay when the employees work overtime on holidays. Although, employers must provide employees full for working 40hours of a week and a half for the hours that they have been working extra. In states like California, daily pay for working overtime is required for the workers who work more than 8 hours a day.

overtime pay of employee
Source: timesheets

Exempt employees

Exempt employee term is used for those employees who receive an annual salary against their hourly rate. They also avail of holiday pay when their companies get closed on national or recognized holidays. The employer receives a risk of changing the status of these exempt employees to non-exempt employees if they aren’t paid on the due date and month and can be paid for overtime that they worked after normal 40-hour service.

In addition to that, exempt employees do not receive holiday pay for federal holidays like Christmas if they choose to work. They will not be compensated for overtime or any other pay.

Non-Exempt employees

Non- exempt employees receive salary w.r.t. hourly rate. Non-exempt employees should not be paid for holiday pays for which they work, but most employers do so. If the non-exempt employee works for 45 hours in a 40-hour week, then employers must pay time and a half.

Exempt Employees
Source: jamesmadison

Requirements to receive holiday pay

  • In order to receive holiday pay, an employee has to work before and after a holiday.
  • According to most employer-employee contracts, an employee may be required to work with the company for a specific time that may be different depending on the company but usually, it is for one year.
  • If the company holds a holiday party and it needs attendance, then the company is obligated to pay its employees for the event. In case, the party exceeds the time limit of 40 weekly working hours, then overtime pay to non-exempt employees will also be paid from the employer.

According to the FLSA (Federal Labor Status Act), employers are not required to pay for holidays or for any time that an employee didn’t spend working. But potential employees hesitate to work for a company that does not provide paid holidays. If a company provides holiday pay or not, it should be clearly stated in the employment policies given to employers at the interview process.

If you need assistance in understanding holiday pay and employment laws, you can find lawyers online to answer your needs in a specific manner. To recall, federal and state laws do not specify laws about holiday pay for employees. It should be considered as a benefit from the employers and employees have to accrue holidays or they should be paid if the assigned holidays remain unused.

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