Understanding Holiday Pay Laws: What Every Employee Need to Know

Holiday pay is extra compensation that employees receive for working on a holiday. Employers can also provide holiday pay for days when employees get time off for holidays. There is no federal law in the United States that requires employers to provide holiday pay, but many employers offer holiday pay as a benefit to attract and retain workers. Some states or local governments have their own holiday pay rules, so it is important to be informed of the laws in the location of your employment.

This article will discuss what holiday pay is, how to calculate it, common paid holidays, and frequently asked questions about holiday pay laws.

Calculating Holiday Pay

Holiday pay refers to the compensation employees receive for designated holidays when they do not have to work. Calculating holiday pay can depend on several factors including the company’s policies and the employee’s usual pay rate. There are different ways employers calculate holiday pay:

• Holiday Pay Equals Normal Pay

Some employers simply pay employees their regular wage for holidays. For example, when employees earn $15 per hour and work an 8-hour shift on a holiday, they would receive $120 for that day.

• Holiday Pay at Time-and-a-Half or Double Pay

Other employers offer increased pay rates for holiday work. Time-and-a-half means employees earn 1.5 times their normal rate. For example, if employees normally earn $15 per hour, they will make $22.50 per hour on a holiday. Double pay means they earn twice their regular rate. So, if they earn $15 per hour, they will make $30 per hour on a holiday.

• Standard Workday, Standard Pay

Some companies choose to pay the same rate whether it is a holiday or a regular workday. In this case, there is no extra compensation for working on holidays. It is always important to check the company's policy to understand how they handle holiday pay.

Holiday pay is intended to compensate employees for designated holidays, ensuring that employers recognize and fairly pay them for their work throughout the year. By understanding how employers calculate holiday pay and knowing their rights under their employer’s policies, employees can make informed decisions and advocate for fair treatment in the workplace.

Typical Paid Holidays

While not all employers offer paid holidays, many choose to recognize certain days each year. Common paid holidays in the United States include:

• New Year's Day
• Memorial Day
• Independence Day
• Labor Day
• Thanksgiving Day
• Christmas Day

Besides the common paid holidays, here are other federal holidays and special days that may  be offered as paid time off:

• Martin Luther King Jr. Day
• Washington's Birthday
• Presidents' Day
• Veterans Day
• Floating holidays (some companies offer a few days per year for employees to use whenever they want)
• Employee's birthday
• Good Friday
• Christmas Eve
• New Year's Eve

Again, this varies by employer, so it is always best to check with the HR department or the employee handbook.

FAQs on Holiday Pay Laws

Holidays are a time for relaxation and joy, but understanding holiday pay can be baffling. Whether an employee is planning a getaway or simply curious, here is a straightforward guide to demystify burning questions about holiday pay.

Q: Do all companies have to offer holiday pay?

A: No, there is no federal law requiring companies to offer holiday pay, but many companies do so as a benefit to their employees.

Q: Can an employer require working on a holiday?

A: Yes, an employer can ask employees to work on a holiday unless their contract states otherwise. They may offer extra pay for working on that day.

Q: What happens when a holiday falls on the employee’s day off?

A: If a holiday falls on the employee’s day off, whether they get extra pay, or a different day off depends on their employer’s policy.

Q: Do part-time employees get holiday pay?

A: It depends on the company's policy. Some employers offer holiday pay to part-time employees, while others do not.

Employee Eligibility for Holiday Pay

Not all employees automatically qualify for holiday pay. Eligibility can depend on various factors such as employment status, length of service, and company policy. Full-time employees are more likely to receive holiday pay compared to part-time or temporary employees. Some companies may require employees to work a certain number of hours before they qualify for holiday pay. Others may require employees to work the day before and the day after a holiday to receive holiday pay. Always check the company's policy to understand the rules.

Impact of Holiday Pay on Overtime

Holiday pay can affect how overtime is calculated. In general, overtime pay is based on hours worked over a standard workweek, usually 40 hours. When an employee works on a holiday and receives extra pay (such as time-and-a-half or double pay), those hours may not count toward the overtime calculation. But when the total hours worked during the week exceed 40, they may remain eligible for overtime pay. It is essential to understand both the company's policy and state laws regarding overtime and holiday pay.

Ensure Fair Holiday Compensation by Understanding Pay Laws

Understanding holiday pay laws is crucial for both employees and employers. While federal law does not require holiday pay, many employers offer it as a benefit. Calculating holiday pay can vary, and common paid holidays include New Year's Day, Independence Day, and Christmas Day among others. Check the company’s policies to know whether one is eligible for holiday pay and how it affects overtime. By staying informed, employees can ensure they are fairly compensated for work during holidays.