The holiday season brings joy and celebration, but for employers and HR professionals, it also raises important questions about compensation obligations. Do you have to pay employees for holidays? Is holiday pay mandatory? Is time-and-a-half mandatory? The answers may surprise you!
Federal law doesn’t require private employers to provide holiday pay at all. However, state laws, industry practices, and company policies create a more complex environment that every employer needs to understand.
This comprehensive guide explains federal and state holiday pay laws, clarifies common misconceptions, and offers practical guidance for managing holiday compensation at your organization.
Federal Holiday Pay Laws
Holiday pay is not mandatory under U.S. federal law, and the Fair Labor Standards Act (FLSA) doesn’t require private companies to offer holiday pay. Employers are only required to pay for time worked, so if an employee takes a holiday off, payment is not obligatory unless specified in the company’s policy.
Holiday Policy in the Private Sector
Private employees in the U.S. receive an average of 7.6 paid holidays per year (Zippia). But the number and percentage vary from industry to industry, with 81% of all private employees receiving access to paid holidays (Bureau of Labor Statistics).
In practice, most private sector employers in the U.S. give their employees the day off for national holidays, or pay them time-and-a-half for working on the day.
Some companies offer a floating holiday, which the employee can take at any time. This time off counts as an employee benefit, just like health insurance or 401(k) contributions. In 2021, many larger employers also began offering the federal holiday of Juneteenth (June 19) as a paid holiday for their employees. This practice has continued to grow over time. As of 2024, 41% of private employers treated Juneteenth as a company holiday (Mercer).
Note: If employees are represented by a union, any holiday pay will be included in their collective bargaining agreement.
Federal Holidays in 2025: How Many Holidays Are There?
The federal government recognizes 11 official holidays in 2025. While these holidays apply to federal employees with guaranteed paid time off, they serve as a reference point for many private employers when designing their own holiday schedules.
The federal holidays for 2025 are:
- New Year’s Day – Wednesday, January 1
- Birthday of Martin Luther King, Jr. – Monday, January 20
- Washington’s Birthday (Presidents’ Day) – Monday, February 17
- Memorial Day – Monday, May 26
- Juneteenth National Independence Day – Thursday, June 19
- Independence Day – Friday, July 4
- Labor Day – Monday, September 1
- Indigenous Peoples’ Day/Columbus Day – Monday, October 13
- Veterans Day – Tuesday, November 11
- Thanksgiving Day – Thursday, November 27
- Christmas Day – Thursday, December 25
- Every 4 years, Federal employees also receive holiday pay for inauguration day, January 20.
Holiday observance dates: When a federal holiday falls on a Saturday, federal employees typically observe it on the preceding Friday. When a holiday falls on Sunday, it’s observed on the following Monday. However, private employers can choose whether to follow this practice or observe holidays on their actual dates.
What Holidays Do Private Sector Employees Receive?
Private sector holiday schedules vary considerably, but certain holidays are far more commonly offered than others, and many coincide with federal holidays.
Typical Paid Holidays for the Private Sector (though not required)
While private employers aren’t legally required to provide any holidays to their employees, the following holidays are included by about 97% of private sector companies’ benefits packages (NFP Leave Management Report):
- New Year’s Day: New Year’s Day is one of the most universally recognized holidays. Most businesses close or operate with reduced staff on this day.
- Easter: Easter Sunday is observed by many Christian employees. Some companies provide the preceding Friday or Easter Monday off to create a long weekend, though this practice is less common than other major holidays.
- Memorial Day: Memorial Day honors those who died while serving in the U.S. military. The long weekend it creates has made it a staple of most holiday schedules.
- Independence Day (Fourth of July): When July 4th falls on a weekend, many companies observe it on the adjacent Friday or Monday.
- Labor Day: Labor Day celebrates the contributions of American workers. The timing at the end of summer makes it a popular holiday for employee time off.
- Thanksgiving Day: Thanksgiving Day is one of the most widely observed holidays.
- Black Friday: Many companies also close the day after Thanksgiving, though this is slightly less common.
- Christmas Day: Christmas is also one of the most observed holidays alongside Thanksgiving and New Year’s Day. Some companies also close on Christmas Eve or give a half-day.
Consistency across sectors: These six holidays—New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas—form the core of most private sector holiday schedules. Companies offering limited holiday benefits typically start with these most widely recognized days.
Optional Holidays for the Private Sector
Beyond the core holidays listed above, some private employers include additional holidays in their benefits packages, though these are less universally offered:
- New Year’s Eve
- Martin Luther King Jr. Day
- Presidents’ Day (Washington’s Birthday)
- Good Friday
- Juneteenth
- Columbus Day/Indigenous Peoples’ Day
- Election Day
- Veterans’ Day
- The Day After Thanksgiving (Black Friday)
- Christmas Eve
Floating holidays: Rather than designating specific additional holidays, many employers offer one or more floating holidays that employees can use at their discretion. This approach provides flexibility for employees to observe religious or cultural holidays meaningful to them while avoiding the need for employers to select which optional holidays to include in their formal schedules.
Part-time and temporary workers: Even at companies that offer paid holidays to full-time employees, part-time and temporary workers often don’t receive the same benefits. Eligibility for holiday pay is typically outlined in company policy and may depend on factors like hours worked or length of employment.
Holiday Pay Rules for Non-Exempt Employees
For non-exempt (overtime-eligible employees), the company is generally not required to pay employees on days they don’t perform work. As long as all non-exempt employees are notified of the closure before they report to work on the holiday, no pay is required.
If the non-exempt employee has accrued vacation or PTO time, the employee may request or the employer may require that the employee use accrued vacation or PTO to cover the days of the holiday closure. Holiday Pay Rules for Exempt Employees
For exempt employees who are paid on a salaried or fee basis, federal law requires the company to pay the employee their regular salary without interruption for business closures that extend less than one full work week. Failure to provide this continued compensation is likely to jeopardize the employee’s exempt status.
A “work week” is the predefined seven-day period that the employer uses for payroll purposes. Unless the closure extends for a full work week, the exempt employee should experience no interruption in salary for a holiday closure.
The employer may require the exempt employee to use accrued vacation time or PTO time to cover the closure. However, if the exempt employee does not have sufficient accrued time to cover the holiday closure, the employer is required to ensure the exempt employee experiences no interruption in salary.
Are Employers Required to Pay Double Time for Holiday Work?
No, federal law does not require employers to pay double time (twice the regular rate) when employees work on holidays. In fact, there’s no federal requirement for any premium pay for holiday work.
How to Manage Holiday Pay at Your Company
If your organization decides to close on specific holidays, do you need to compensate your employees? The answer to this question depends on the type of employment contract, where you do business, and whether your organization is in the public or private sector.
Sample Content for a Company Holiday Pay Policy
Including clear, comprehensive holiday policy language in your employee handbook prevents misunderstandings and provides a reference point for both employees and managers. Here’s sample content you can adapt for your organization:
PAID HOLIDAYS
[Company Name] recognizes the following paid holidays each year:
- New Year’s Day
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
- [Add any additional holidays your company observes]
Eligibility: Full-time employees are eligible for paid holidays immediately upon hire. Part-time employees [are/are not] eligible for holiday pay [on a prorated basis based on scheduled hours].
Holiday Pay Calculation: Eligible employees who do not work on a recognized holiday will receive [8 hours/their regular scheduled hours] of pay at their base rate.
Holidays Falling on Weekends: When a holiday falls on a Saturday, it will be observed on the preceding Friday. When a holiday falls on a Sunday, it will be observed on the following Monday.
Working on a Holiday: Employees required to work on a recognized company holiday will receive [their regular pay plus holiday pay/time-and-a-half for all hours worked/double time for all hours worked] as compensation for working the holiday.
Holiday During Paid Time Off: If a recognized holiday falls during a period when an employee is taking paid time off, the holiday will be paid as a holiday and will not be deducted from the employee’s PTO balance.
Holiday Scheduling: Business needs may require that some employees work on holidays. [Managers will assign holiday work as needed/Holiday work will be rotated among staff/Holiday work will be offered on a voluntary basis first]. Employees should plan accordingly and discuss any conflicts with their manager in advance.
Floating Holidays: In addition to the recognized holidays listed above, eligible employees receive [number] floating holiday(s) per year. Floating holidays must be scheduled in advance with manager approval and should be used within the calendar year. [Unused floating holidays do not carry over/will be paid out at year-end.]
Note: This is sample language only. Consult with legal counsel to ensure your holiday policy complies with applicable laws and meets your specific business needs.
State-Specific Holiday Laws & Rules to Know
While federal law doesn’t mandate holiday pay for private employers, several states have specific regulations that affect how holidays are treated, particularly when employees work on holidays. Understanding your state’s requirements is important for compliance.
Massachusetts “Blue Laws” in 2025
Massachusetts has specific regulations, called “blue laws,” that affect holiday work and pay. The laws are somewhat complicated depending on whether a company is retail, non-retail, or manufacturing and should be verified on the Massachusetts’ Attorney General’s website for the most up-to-date guidance.-
Massachusetts Public Holidays 2025
- New Year’s Day – Wednesday, January 1
- Martin Luther King Jr. Day – Monday, January 20
- Washington’s Birthday – Monday, February 17
- Patriot’s Day – Monday, April 21
- Memorial Day – Monday, May 26
- Juneteenth– Thursday, June 19
- Independence Day – Friday, July 4
- Labor Day – Monday, September 1
- Columbus Day – Monday, October 13
- Veteran’s Day – Tuesday, November 11
- Thanksgiving Day – Thursday, November 27
- Christmas Day – Wednesday, December 25
Retail Rules for Working Holidays in Massachusetts
Retail employees cannot work on Christmas, Columbus Day (before noon), Thanksgiving, or Veteran’s Day (before 1:00 p.m.) unless the retail business has a permit from their local police department as well as approval from the state’s Division of Occupational Safety.
They can work without a permit on New Year’s Day, Memorial Day, Juneteenth Independence Day, Independence Day, Labor Day, Columbus Day (after noon), and Veteran’s Day (after 1:00 p.m.), but they can refuse to work.
Retail workers can work on Martin Luther King Day, President’s Day, Evacuation Day, Patriots’ Day, President’s Day, and Bunker Hill Day without limitation or a permit.
Rhode Island Premium Pay in 2026
Rhode Island requires premium pay for certain employees who work on Sundays and holidays, making it one of the few states with mandated holiday premium pay.
- New Year’s Day
- Memorial Day
- Juneteenth
- Independence Day
- Victory Day (second Monday in August)
- Labor Day
- Indigenous Peoples/Columbus Day
- Veterans Day
- Thanksgiving Day
- Christmas Day
Do California Business Have to Offer Holiday Pay or Time-and-a-Half?
California businesses don’t legally have to pay time and a half for holidays; however, companies can choose to provide extra pay as a benefit.
What Is the Law on Holiday Pay in Arizona?
Holiday pay is not required by law in Arizona; however, private employers can offer it as part of their benefits package. Private employers can require employees to work on holidays.
What Is Holiday Pay in Tennessee?
Private employers are not required by law to provide holiday pay in Tennessee, but they can choose to do so if they want to provide it as part of their benefits package.
How Does Holiday Pay Work in Alabama?
Alabama has no state laws requiring private employers to provide holiday pay or premium pay for working holidays. Holiday pay is entirely at the employer’s discretion in Alabama.
How Paycor Simplifies Paid Holiday Policy Management
Holiday pay is a complicated topic. You can offer it to your employees or not, but if you do then the rules can vary depending on whether employees are exempt, non-exempt, contractors, construction workers, or freelance workers. There are also other complexities like eligibility dates for holiday pay, or other types of payment such as vacation or sick time. Paycor can help!
Ready to streamline your holiday pay management? Take a guided tour of Paycor’s platform to see how our time and attendance, payroll, and HR software solutions work together to simplify holiday administration while ensuring accuracy and compliance. Let us show you how the right technology makes managing holiday benefits easier for your HR team and clearer for your employees.
