Are Employers Required to Pay Workers for Holidays?

In our last post, we talked about unlimited vacation, but this time of year, vacation is obviously not the only thing on our minds. As I sit in union negotiations this week talking about holidays and holiday pay (among other topics), and since we are exactly 1 week out from Christmas and 2 week’s out from New Year’s Day today, let’s talk about holidays and, more specifically, holiday pay. A frequent question in comments, reader e-mails, and searches on the blog asks whether employers must provide holidays to employees, or variations on that topic (must holidays be paid, must employees be paid overtime/double time/some other premium for working a holiday, etc.).

Unsurprisingly, the answer will depend on where the business is located and/or the city, state, or other locality where the employee works. Holiday pay is not solely a work/life balance and employee benefit issue, either, though that is certainly part of it.

At my company, Lifeway Foods, we operate 7 days a week making kefir. Cows do not take “holidays” and we have to provide consistent production volumes to meet our distributor and retailer partners’ needs. Many businesses, from power companies to retailers to public safety agencies to Netflix, have no “holidays” because their operations require service 7 days a week, and in many cases 24 hours a day, 365 days a year. Many employers have adopted “floating” holidays (time off on other dates in the year) because their busiest times tend to be holidays themselves. We will talk about floating holidays in a future post. They can raise their own set of issues.

Providing Holidays

Neither the federal Fair Labor Standards Act, nor any other federal law, currently requires private sector employers to provide holidays to their employees, whether on federally recognized holidays or on any other days. Similarly, neither the FLSA nor any other federal law requires employers to pay non-exempt employees (whether hourly or salaried) for holidays on which they are not required to work. The FLSA requires employers to treat exempt employees differently, though this issue arises comparatively infrequently.

Holidays, Hours Worked, and Overtime

Do holidays count toward hours worked during a week? In a word, no. Where employers provide holidays off, they have the right and discretion to pay workers (or not) for those holidays. Therefore, employers are not required to count holiday hours off as “hours worked” for purposes of overtime calculations (few do, in my experience).

Holiday Premiums

What about holiday premiums? The answer here is similarly simple. Neither the FLSA nor federal law currently require private sector employers to pay an extra premium to employees for working on a holiday. States are a bit more of a mixed bag. In California, as the Department of Industrial Relations’ Division of Labor Standards Enforcement explains, “hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week.” The only requirement in federal or most state laws is that employers must pay non-exempt employees the overtime premium required for work in excess of 40 hours in a workweek. Some states, like Massachusetts and New Hampshire, require certain employers to provide premium pay under certain circumstances, and other state or local laws require a premium for work in excess of eight hours in a workday.

Taking New Hampshire as one example, a state statute prevents any employee from working “in any mill or factory on any legal holiday” except to the extent it “is both absolutely necessary and can lawfully be performed on the Lord’s Day” (RSA 275:28). Even outside of mills and factories, state law might intrude on your holiday policies. New Hampshire enacted a statute in 2009 (RSA 115-A:29) that requires private employers to permit honorably discharged veterans of the United States armed forces to take the day off on Veterans Day, November 11, regardless of whether the employer recognizes the holiday. Unless otherwise required by law, the day off can be without pay.

While most employers have the right and discretion under federal and state law to set holiday policies, remember that this right is not absolute. As more states and localities wade into fair scheduling issues, they often adopt more stringent requirements that impact holiday pay. Check these local requirements before proceeding and whenever you review your handbooks and other policies.