When holidays roll around, employers start thinking about how much to pay their employees and whether holiday pay is mandatory at all.
The Federally Recognized Holidays
- New Year’s Day
- Birthday of Martin Luther King, Jr.
- Washington’s Birthday
- Memorial Day
- Independence Day (4th of July)
- Labor Day
- Columbus Day
- Veterans Day
- Thanksgiving Day
- Christmas Day
Many companies offer 5 to 10 of these holidays paid per year. But the custom has left many employers unclear on whether holiday pay is actually a requirement or just a preference.
Holiday Pay Is Not Mandatory
It is a common misconception that the Federal government requires businesses to pay employees extra for holidays. Besides Rhode Island and Massachusetts, there aren’t any state or Federal laws requiring private employers to pay employees extra for working on a holidays, nor is there any law requiring employers to give employees paid time off for holidays. Federal employees, however, do get paid holidays.
Many employers offer time and a half as incentive to work on holidays but that’s just a custom, not a law.
Paid Holidays Do Not Factor In to Overtime Calculations
An employee can earn holiday pay and overtime in the same week only if the employee spends more than 40 hours doing actual “work”. (In California, overtime is paid by day.) As an example, let’s say the employee puts in 36 hours during a holiday week and gets 8 hours holiday pay. That holiday pay does not figure into the overtime calculation. The payroll would look like this: 36 “regular” hours and 8 “holiday” hours at the the regular rate. This would not be 40 hours regular and 4 hours of overtime.
Other types of non-working pay include sick, vacation, bereavement, jury duty, ect., which are treated similarly with regard to overtime.
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