Employers and employees alike are often confused about the laws and best practices surrounding holiday pay. Holiday pay practices are typically set by each company and communicated to employees through the employee policy guide. Here are some common questions we receive about holiday pay:
Do I have to pay employees for holidays if they are not working?
For non-exempt hourly employees, no. The Fair Labor Standards Act (FLSA) does not require payment to non-exempt employees for time not worked, such as vacations or holidays.
If exempt employees are given the day off, employers must pay their full weekly salary if they work any hours during the week in which the holiday falls.
Companies often choose to pay all employees (or all full-time employees) for holidays particularly when the business is closed, and no employees are working. According to the Bureau of Labor Statistics 71 percent of small employers (those with fewer than 100 employees) offer some type of holiday pay.
Since it is so common for employers to offer some type of holiday pay, it can be a disadvantage if you choose not to. Make sure your employees understand your policy so there is not confusion or frustration.
Do I have to give employees time off during the holidays?
There is no Federal law that requires an employer to provide time off, paid or otherwise, to employees on any holidays.
Am I required to pay extra to employees who work holidays?
No. Holidays can be paid at the regular rate of pay for employees who work. Many companies however choose to pay extra incentive pay to employees who work holidays. According to research by the Society of Human Resource Management (SHRM), 57%) of organizations pay a premium for employees working on a holiday when the organization would normally be closed. Of these organizations, 40% pay double-time and 21% pay one-and-a-half-time, while 19% pay overtime and 21% pay some other type of premium.
Can I attach conditions to the receipt of holiday pay?
Yes. For example, an employer may require that employees work—or be on an approved leave status—the day before and after a holiday in order to receive holiday pay. An employer may also require an employee to have worked for the company for a specified period of time before becoming eligible for holiday pay.
Do I have to provide the same holiday benefits to all employees?
No, as long as the basis for the different treatment is not discriminatory. For example, an employer can provide holiday pay only to full-time and not to part-time employees.
Now is a great time to review your holiday pay practices and make any adjustments for the new year. If you have questions, reach out to our People Strategy Team at (801) 443-1090 or humanresources@helpside.com