Answers to questions about holiday pay

The holiday season is very nearly upon us, which means it’s time to answer some frequently asked questions regarding holiday pay for employees.

Q

Must employers provide holiday pay for federally recognized holidays?

A

No. With few exceptions, employers may choose whether or not to offer holiday pay and may choose whether to close or remain open on holidays.

If your company chooses to remain open (or the nature of your business dictates that you remain open), holidays may be treated the same as any other workday.

Some states, such as Massachusetts, have restrictions for working on holidays, and some collective bargaining agreements may include holiday pay requirements.

Q

If employees work on holidays, must employers pay them a premium?

A

Generally, no. Employees who work on a holiday are not entitled to extra compensation or any other adjustment to pay (once again, collective bargaining agreements could be an exception to this rule).

It is up to your company’s discretion whether to offer a premium for working on a holiday. It should be noted, however, that while paying a premium is not required by law, it is a common practice and can have a significant impact on employee morale.

Q

Can an employer require employees to work the days before and after a holiday to receive holiday pay?

A

Yes, your company may require this for most nonexempt employees, and it may deny holiday pay if the employee calls in sick on the day before or after a holiday.

The company cannot, however, enforce that rule on salaried exempt or salaried nonexempt employees. Federal law prohibits deductions from the pay of these salaried employees for holiday closings, so they must receive the full salary in weeks that include a holiday.

Q

If an employer shuts down for the week of Christmas, can it still give holiday pay?

A

Yes. As noted, holiday pay is subject only to company policy or union contracts. Your company may choose to provide holiday pay even if the business is closed for a week or more.

Note that exempt and nonexempt salaried employees do not

need to be paid a full salary if they do not work for an entire workweek.

Giving them holiday pay during an otherwise unpaid week does not create an obligation to pay the full salary for that week. Although deductions from their salaries for holidays are prohibited, they do not earn a salary if they do not work that week.

Q

If a normal payday falls on a holiday, should the employer deliver checks early, or after the holiday?

A

The answer will depend on state law. Some states simply require providing paychecks within a specified time, such as within 15 days after the working period ends. Other states will require providing the check early if the normal payday falls on a holiday.

Q

Can an employer policy deny holiday pay for the first 90 days of employment?

A

Yes, for most nonexempt employees. As described in previous answers, however, the company could not deduct pay from certain salaried employees for a holiday if they work during that week. They must receive the full salary every week, even if they are not yet eligible for holiday pay (and even if the company closes for a holiday).