Posted on November 13, 2015

Top 5 Questions about Holiday Pay

The holidays are fast approaching and you are likely facing questions about holiday pay or dealing with related issues. Where should you turn? Paycor has the answers you need. We’ve compiled a list of the top 5 holiday pay questions organizations need to know.

1. Do you have to provide holiday pay to employees?

For non-exempt (overtime-eligible employees), the organization is generally not required to pay employees for days on which they do not perform work. For exempt employees who are paid on a salaried basis, the Fair Labor Standards Act (FLSA) requires the company to pay the employee his or her regular salary without interruption for business closures that extend less than one full work week.

As a benefit to workers, many companies opt to pay non-exempt employees for certain holiday closures. In fact, according to the Society for Human Resource Management (SHRM), 97% of responding employers provide some type of paid holidays to their employees. The company may set its policy in this regard, and it has a good deal of discretion regarding the payment and calculation of the holiday pay. This may also include “shifting” the days of the recognized holiday so as to reduce the amount of vacation, PTO or unpaid time employees may experience during the holiday closure. It’s a good idea to create a written policy regarding holiday pay and apply it consistently among employees.

2. What if a holiday falls on an employee’s regularly scheduled day off, or when the organization is closed?

Though not required, employers generally offer an employee the option of taking off another day if a holiday falls on an employee’s regular day off. This is typical for employees who work compressed schedules (four ten-hour days compared to five eight-hour days). It’s also common for employers to observe a holiday on the preceding Friday or the following Monday when a holiday falls on a day when the employer is not typically open.

3. For non-exempt employees who receive holiday pay, can we require that they be subject to an introductory period to qualify?

Your organization can determine whether non-exempt employees qualify for holiday pay immediately or after serving a set introductory period. This policy should be provided to the employee in a handbook or as a written policy. Employers can also elect to provide holiday pay only to full-time employees but not part-time or temporary employees.

4. Can organizations require employees to work on holidays?

Since paid holidays are a discretionary benefit, employers may require employees to work holidays according to the needs of the organization. If employees could be required to work on holidays, it is important to include this language in your handbook or written policies.

5. Can organizations place conditions on the receipt of holiday pay?

Yes, in fact, some employers are concerned that employees will combine a paid holiday with other paid time off to create extended vacations. To prevent this situation, organizations often require employees to work the day before and after a paid holiday to be eligible to receive holiday pay.

Do you have holiday-related questions we didn't answer here? Great news: Paycor is hosting a webinar on December 9 to discuss these issues and more. Our HR expert will also be answering live questions. Sign up today for our webinar!


Sources: HR Support Center and Workforce.com


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