Top 5 Questions about Holiday Pay
Top 5 Questions about Holiday Pay

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


Subscribe to Our Resource Center Digest

Enter your email below to receive a weekly recap of the latest articles from Paycor's Resource Center.

Check your inbox for an email confirming your subscription. Enjoy!

More to Discover

How to Avoid Payroll Tax Penalties in 2019

How to Avoid Payroll Tax Penalties in 2019

Employment laws are getting more complex and businesses are finding it harder to remain compliant. According to the IRS, 40% of small and medium-sized businesses are fined each year for failing to meet payroll tax regulations. These organizations are at risk because they tend to run payroll through manual processes and disconnected software, leading to miscalculations, incorrect filings and late withholdings deposits. If you’re a business leader and want to avoid fines and penalties, here’s what you need to know. What Payroll Taxes Are You Required to Pay? State and federal taxes include: Federal unemployment taxes: Employers must pay this tax based on the gross pay of all employees. These taxes can either be paid quarterly or annually...

Is Your Time and Attendance Solution Delivering Results?

Is Your Time and Attendance Solution Delivering Results?

Not all time and attendance solutions are created equal. Perhaps you’re manually keeping track of time cards or your automated time and attendance system isn’t living up to your expectations. Either way, it might be time to make a change. Modern time and attendance software should deliver results—mainly savings and accuracy—for any human resources department. Accurate Time Tracking Leads To Labor Cost Savings In any organization, employees usually are both the largest expense and the largest asset. Maintaining control of labor costs is critical to the overall bottom line and it all starts with accurate time tracking. According to the American Payroll Association (APA), organizations can experience anywhere between a 1% and 7% clerical...

2019 Compliance Changes

2019 Compliance Changes

It’s critical that you’re aware of all the tax changes that could affect your organization in 2019. This session will include frequently asked questions, an overview of federal and state withholding updates and trends we are seeing in areas of Tax and ACA compliance. Speakers: Arlene Baker and James Schwantes Arlene Baker is a Senior Compliance Analyst with over 40 years of payroll and tax experience. She’s a member of the National Payroll Reporting Consortium focusing on IRS compliance, and she’s been a member of the national and local APA for 25 years. In 2003, Arlene was awarded the Ohio Payroll Professional of the Year award. James Schwantes is a Compliance Analyst with a legal and tax background. Prior to working at Paycor in the...

Proposed Department of Labor Rule to Update Regular Rate Requirements

Proposed Department of Labor Rule to Update Regular Rate Requirements

In late March, the Department of Labor (DOL) announced a proposed rule to clarify and update the regulations governing the regular rate requirements under the Fair Labor Standards Act (FLSA). Unless exempt, an employee’s regular rate of pay is used to determine how much he or she should be paid for working overtime. The FLSA generally requires overtime pay of at least 1.5 times the regular rate for hours worked past 40 hours per week. The proposed rule details what forms of payment employers can exclude when determining an employee’s regular rate of pay. The cost of the following items would no longer apply: Tuition programs Discretionary bonuses Payment for unused paid leave Wellness programs, fitness classes, gym access, onsite...