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Is Holiday Pay Mandatory In Your State?
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Is Holiday Pay Mandatory In Your State?

One Minute Takeaway

  • The United States has no federal law requiring private companies to offer holiday pay.
  • Two states, Rhode Island and Massachusetts, have special laws about holiday pay.
  • Companies are not generally required to pay non-exempt employees for days they do not perform work.

Once November rolls around, many employees look forward to receiving much-needed time off and holiday pay. However, what’s surprising is that in most states, holiday pay is not legally mandatory for workers in the private sector.

Despite this, many private companies provide some form of holiday pay to their employees. That’s because most employees expect holiday pay, and offering it can reduce employee turnover and boost morale. 

Do you know the laws in your state and jurisdiction? Most federal employers are required to provide holiday pay. There are also 2 states – Rhode Island and Massachusetts – that have special laws about holiday pay.

Holiday Pay Laws

Although holiday pay is customary, the United States has no federal law requiring private companies to offer holiday pay. Most federal employees, however, receive 11 paid holidays per year.

The Fair Labor Standards Act (FLSA) requires an employer to pay its employees for time worked, including on holidays. Technically, this means that if an employee takes the day off for Christmas, employers don’t have to pay them for that time. However, the company policy should clearly state whether holiday pay is provided. As you create or update this policy, it’s always best to consult with an employment attorney.

Private Employees Access to Holiday Pay

Private employees in the U.S. receive an average of 7.6 paid holidays per year (Zippia). The number and percentage vary from industry to industry, with 75% of all private employees receiving access to paid holidays.

If employees are represented by a union, then any holiday pay will be included in their collective bargaining agreement. 

Holiday Policy in the Private Sector

In practice, most private sector employers in the US give their employees the day off for national holidays, or they pay them time-and-a-half for working on the day

Some companies also 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 2020, many larger employers also began offering Juneteenth (June 19) as a paid holiday for their employees. This practice has continued to grow over time. As of June 2023, 39% of private employers treated Juneteenth as a holiday.

Federal Holidays 2024

The difference between public and private employees is a complex topic in America when it comes to employee benefits. While they both work hard, there are some key differences between the two regarding holiday pay. Most federal employees are mandated to take off work with pay for the following 11 holidays.

2024 Official Holiday Dates for Federal Employees:

  • January 1 – New Year’s Day
  • January 15 – Martin Luther King, Jr. Day
  • February 19 – George Washington’s Birthday/Presidents’ Day
  • May 27 – Memorial Day
  • June 19 – Juneteenth National Independence Day
  • July 4 – Independence Day/Fourth of July
  • September 2 – Labor Day
  • October 14 – Columbus Day/Indigenous Peoples Day
  • November 11 – Veterans Day
  • November 28 – Thanksgiving
  • December 25 – Christmas
  • **Every 4 years, Federal employees also receive holiday pay for inauguration day, January 20. 

What Happens If The Holiday Falls on a Weekend?

If the holiday happens to be on a Saturday, then employees typically receive the Friday preceding the holiday off. If the holiday falls on a Sunday, then they normally get the following Monday off. 

What Holidays do Private Sector Employees Receive?

While it is not required, in general, many private sector employers provide paid holiday time for their employees, and many of those holidays coincide with federal holidays.  Private sector employees might not get the same 11 days as Federal employees. However, there are 6-8 that are extremely common days off, to the point where your team likely expects them.

Typical Paid Holidays – Private Sector (though not required)

  • New Year’s Day
  • Easter
  • Memorial Day
  • Independence Day/Fourth of July
  • Labor Day
  • Thanksgiving Day
  • Friday after Thanksgiving
  • Christmas Day

Optional Holidays – Private Sector

  • George Washington’s Birthday/Presidents’ Day
  • Juneteenth
  • Good Friday
  • Martin Luther King, Jr. Day
  • Veterans Day
  • Columbus Day/Indigenous Peoples Day
  • Christmas Eve
  • New Year’s Eve
  • Election Day
  • Floating Holidays – used at the employee’s discretion.

Massachusetts “Blue Laws” in 2024

The “Blue Laws” in Massachusetts categorize businesses into retail, non-retail, or manufacturing. Each is treated a bit differently. Non-retail and manufacturing businesses need permits by the local police to be open on Sundays and most holidays unless they have exemptions. Retail businesses do not require a permit to be open on Sundays.

Many non-retail and manufacturing businesses require a permit to open on certain holidays. The holidays with the most restrictions are Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, Thanksgiving Day, and Christmas Day. 

Massachusetts Public Holidays 2024

  • New Year’s Day – Monday, January 2, 2023
  • New Year’s Day – Monday, January 1, 2024
  • Martin Luther King Jr. Day – Monday, January 15, 2024
  • Washington’s Birthday – Monday, February 19, 2024
  • Patriot’s Day – Monday, April 15, 2024
  • Memorial Day – Monday, May 27, 2024
  • Juneteenth Independence Day – Wednesday, June 19, 2024
  • Independence Day – Thursday, July 4, 2024
  • Labor Day – Monday, September 2, 2024
  • Columbus Day – Monday, October 14, 2024
  • Veteran’s Day – Monday, November 11, 2024
  • Thanksgiving Day – Thursday, November 28, 2024
  • Christmas Day – Wednesday, December 25, 2024

Retail Rules for Working Holidays in Massachusetts

Retail employees cannot work on Christmas, Columbus Day (before noon), Thanksgiving, and 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.

These holidays and Sundays used to guarantee premium pay. However, as of January 1, 2023, however, retailers are only required to pay their regular rate.

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 2024

Rhode Island is the only State that requires employers to pay non-exempt employees a premium rate for working on Sundays and holidays. If your team members work on any of these days, you’re legally required to pay them 1.5x their normal rate.

Rhode Island Public Holidays 2024

  • New Year’s Day – Monday, January 1, 2024
  • Memorial Day – Monday, May 27, 2024
  • Juneteenth – Wednesday, June 19, 2024
  • Independence Day – Thursday, July 4, 2024
  • Victory Day – Wednesday, May 8, 2024
  • Labor Day – Monday, September 2, 2024
  • Columbus Day – Monday, October 14, 2024
  • Veteran’s Day – Monday, November 11, 2024
  • Thanksgiving Day – Thursday, November 28, 2024
  • Christmas Day – Wednesday, December 25, 2024

Sample Content for Employee Handbook

Here’s some sample wording you can use if you’re building an employee handbook and your company offers paid holiday time off.

Regular employees who work 40 hours per week are eligible for holiday pay. Nonexempt employees become eligible after three months of service. Exempt employees are immediately eligible on hire. Temporary or part-time employees are not eligible.

[Company Name] offers the following paid holidays for all eligible employees. If a holiday falls on a Saturday, the day off will be taken on Friday. If the holiday falls on a Sunday, the following Monday will be the paid day off.

  • New Year’s Day
  • President’s Day
  • Memorial Day
  • Independence Day
  • Labor Day
  • Thanksgiving Day and Day after Thanksgiving Day
  • Christmas Eve and Christmas Day

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.

What You Need to Know about Holiday Pay Policies

Per the Department of Labor, the Fair Labor Standards Act does not require payment for holidays. Employers are responsible for establishing which days are recognized as paid holidays and communicating that to employees through an company handbook.

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.

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.

State-Specific Rules to Know

Is Holiday Pay Time And a Half in California?

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. The one exception is: You do have to pay time and a half if the employee has already worked 40 hours that week, or 8 hours that day. At that point, overtime pay will kick in.

How Does Holiday Pay Work in Alabama?

A private employer does not have to pay holiday pay in Alabama, unless they choose to do so as part of their benefits package. They can also 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.

What is The Law on Holiday Pay in Arizona?

Holiday pay is not required by law in Arizona; however, the private employers can provide this as part of their benefits package. Private employers can require employees to work on holidays.

How Paycor Helps

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 they’re 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! Unlike many of our competitors, we don’t sell off-the-shelf technology. Instead, we tailor technology, including Paycor Payroll and Paycor Time and Attendance, specifically for your business.