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

Is Holiday Pay Mandatory In Your State?

The FLSA Only Requires Employers to Pay for Time Worked

Unlike most of the European Union, the United States has no federal law requiring private companies to pay for national holiday time off (by law, all employees in the EU also get a minimum of 28 paid vacation days). The Fair Labor Standards Act (FLSA) requires an employer to pay its employees only for time worked. This means that if an employee takes the day off for Christmas, you don’t have to pay them for time not worked.

But Most Employers Offer Paid Holidays

In practice, though, 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 is considered to be an employee benefit, just like health insurance and free soft drinks in the break room.

Public Employees Play by Different Rules

Public employees—those folks who work for state and federal government—however, play by an entirely different set of rules. They’re mandated to take off for the following holidays with pay:

  • New Year’s Day (January 1)
  • Martin Luther King, Jr. Day (3rd Monday in January)
  • Washington’s Birthday (3rd Monday in February)
  • Memorial Day (last Monday in May)
  • Independence Day (July 4)
  • Labor Day (1st Monday in September)
  • Columbus Day (2nd Monday in October)
  • Veterans Day (November 11)
  • Thanksgiving Day (4th Thursday in November)
  • Christmas Day (December 25)

Do You Own a Business in Massachusetts or Rhode Island?

If so, be advised that these states march to their own drumbeat. Massachusetts and Rhode Island are the only two states in the union that require private companies to offer paid time off for national holidays.

Massachusetts State Holidays

In addition to the above federal holidays observed by public entities, Massachusetts also observes the following dates and requires employers to pay their workers:

  • Evacuation Day (March 17 – Suffolk County Only)
  • Patriot’s Day (3rd Monday in April)
  • Bunker Hill Day (June 17 – Suffolk County Only)

Their holiday time off rules fall under Massachusetts’ Blue Laws, and they further break down the paid holidays by retailers, non-retailers and manufacturers.

Retail Rules for Working Holidays

Retail employees can only work on Christmas, Columbus Day (before noon), Thanksgiving and Veteran’s Day (before 1:00 p.m.) if they have 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, Labor Day, Memorial Day, Columbus Day after noon), Independence Day and Veteran’s Day (after 1:00 p.m.), but they can refuse to work. If they do work, they must be paid time-and-a-half.

They can work on Martin Luther King Day, Patriots’ Day, President’s Day, Bunker Hill Day and Evacuation Day without limitation.

Non-Retail Rules

Non-retail employees, on the other hand, can only work Christmas, Veterans Day (before 1:00 p.m.) Thanksgiving, Columbus Day (before noon), Labor Day, Independence Day and Memorial Day only if they have a permit from the police. If they are working on a holiday, they’re paid their regular rate. They can work without limitation on New Year’s Day, Patriot’s Day, Martin Luther King Day, Bunker Hill Day, President’s Day, Columbus Day (after noon), Evacuation Day and Veterans’ Day (after 1:00 p.m.).

Manufacturing companies generally operate by the same laws as non-retail businesses. They can stay open on holidays with police permits, but their employees can’t be required to work except for under very limited circumstances: The work must be absolutely essential, and the business must require continuous operation (such as a power plant).

Rhode Island State Holidays

Rhode Island’s law is less restrictive than Massachusetts’. It requires private employers to pay employees time-and-a-half for working on Sundays and the following holidays:

  • New Year’s Day
  • Memorial Day
  • Independence Day
  • Victory Day
  • Labor Day
  • Columbus Day
  • Veterans’ Day
  • Thanksgiving Day
  • Christmas Day

The law also permits employees to refuse to work on Sundays and legal holidays. In addition to the holidays above, Rhode Island also recognizes:

  • Rhode Island Independence Day (May 4th)
  • Victory Day (2nd Monday in August)
  • Election Day (1st Tuesday of November)

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 of our 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 Paycor Helps

Paying employees can be a tricky business, especially when holidays, vacation days and overtime pay are in the picture (e.g., do you have to pay time-and-a-half or double time?). Paycor can help. Unlike many of our competitors, we don’t sell off-the-shelf technology. Instead, we tailor technology, including payroll and time and attendance, to your business. Learn more and view a demo today.


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