The Nitty Gritty: Holiday Pay and Time Off

Today, we’re going to take a quick look at one of the most confusing topics in HR and benefits management: holiday pay and time off.

If it’s been awhile since you’ve reviewed your company’s policy regarding time off and holiday pay, you should set aside some time to do so to make sure your policy and practices are up-to-date and in compliance with both federal and state law. In the meantime, here are some quick answers to pressing questions that can help you get started.

Many employers wonder if they’re required to provide time off for a holiday. Although not generally required by federal or state law, many employers choose to grant employees time off for certain holidays or to close the business altogether on those days.

However, keep in mind that companies with 15 or more employees are subject to federal religious discrimination laws, and may need to allow employees time off for religious observance. You should also consult your state’s nondiscrimination laws, because some states provide similar protections for employees of even smaller companies.

Now, let’s look at pay. Again, federal law and most state laws do not require employers to pay employees if time off for holidays is granted. Whether or not employees are paid for holidays is generally a matter of company policy. However, you need to be careful when it comes to exempt employees. As a general rule, if an exempt employee performs any work during a workweek, he or she must be paid the full salary amount.

When an employee works on a holiday, granting extra compensation…above and beyond the regular rate of pay…is generally a matter of company policy. Of course, you must be sure to comply with any specific state law requirements regarding holiday pay. Although some companies pay employees at a special rate, such as time-and-a-half, for holiday shifts, generally an employee is only entitled to his or her regular pay, plus any overtime.

Remember that states will generally enforce an employer’s written policy regarding holiday pay, so it’s important to follow company policy and to apply the rules consistently and fairly to all employees. For questions about the specific requirements in your state, contact your state labor department or a knowledgeable employment law attorney.

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