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Why Employee Holiday Pay Is Harder Than You Think

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employee holiday pay

With the holiday season right around the corner, many people might be looking forward to taking some time off to spend with family and friends. Although the time off from work gives employees a chance to de-stress and relax, some employees may actually look forward to working during holidays to earn some extra pay. However, employees should keep in mind that not all organizations handle holiday pay the same way.


Am I required to pay holiday pay?

The US Department of Labor’s Fair Labor Standards Act (FLSA) has no requirement for employers to pay employees for time off on holidays, meaning employees only need to be paid for the time they have actually worked. The federal law also does not have any requirements for employers to award premium pay such as time-and-a-half or double-time for worked time on a holiday, which means employers may choose to treat a holiday the same as any other normal workday. Of course, many organizations do offer paid holidays and/or premium pay for time worked on holidays as benefits to their employees. These perks are a nice way to show appreciation to the employees and reward them for their contributions to the company.


Can I have different holiday pay rules for different employees?

Some employers choose to implement separate holiday pay policies for different groups of employees. For example, a company may choose to provide salaried full-time employees with holiday pay while making temporary or part-time employees ineligible for the benefit.


How do I communicate our holiday pay policy to employees?

With all of this in mind, companies should have clear policies in place so employees know what to expect. A good holiday policy might list the specific days that are considered holidays (don’t forget about state or local holidays) and how they are treated. A business may choose to treat a company holiday as a paid day off, or as a day that is awarded premium pay in the form of overtime, time-and-a-half, double-time, or even a flat bonus for the day.


Do states have their own holiday pay laws?

An important thing to keep in mind when it comes to policies around holiday pay is state law regarding holiday pay. Some states (Massachusetts and Rhode Island) may have their own rules which might require employers to treat holidays in a specific manner, whether it is pay for time off, premium pay for working, or both. Many states have rules for state-specific holidays as well, which can add to the complexity and make it challenging for employers to keep track of who gets paid for what, especially in larger multi-state organizations with employees that are spread out across multiple locations.


Where can I get help with holiday pay compliance?

Payroll can be a complicated ordeal, especially when it involves holidays and multi-state rules. Developing and maintaining a compliant policy while keeping track of the different laws and regulations for all of your employees can be a nightmare for an organization that may not have a dedicated and experienced individual or team to constantly manage it. The HR and payroll experts at Valor Payroll Solutions can ease the burden of compliance and make sure your employees are paid accurately and in accordance with the company’s policies as well as the applicable state and federal laws. Contact us today and see how we can help!



Christina Hageny

Christina Hageny

President - Valor Payroll Solutions

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