Is holiday pay mandatory?


Must an employer provide employees time off on holidays?

No. There is no Federal law that requires an employer to provide time off, paid or otherwise, to employees on nationally recognized holidays. Holidays are also typically considered as regular workdays. Employees receive their normal pay for the time they work on a holiday if the employer does not offer holiday pay.

On a state level, legislation, ballot initiatives, or court ruling can create new rules regarding employers and holiday pay.

Must an employer accommodate an employee’s observance of a religious holiday?

An employer is obligated to provide reasonable accommodation for the religious practices of its employees unless it can show that the accommodation would result in undue hardship for its business. To accommodate employees, many employers offer a floating holiday in addition to the regularly scheduled holidays. This allows employees to take time off for religious observances that are not covered by the established holiday schedule.

Courts addressing the issue of religious accommodation generally agree that unpaid time off can be a reasonable accommodation, as can allowing an employee to use a vacation day to observe a religious holiday.

Generally, employers require that floating holidays are taken in the same year they are granted and do not allow these days to carry over into the next year.

Employees are usually required to give adequate advance notice of their intention to take a floating holiday.

Must holiday time off be paid? 

For non-exempt hourly employees, no. An employer does not have to pay hourly employees for time off on a holiday. An employer is only required to pay hourly employees for the time they actually worked.

For exempt employees (i.e., salaried employees who don’t receive overtime), if they are given the day off, employers must pay their full weekly salary if they work any hours during the week in which the holiday falls.

May an employer attach conditions to the receipt of holiday pay?

Yes. For example, an employer may require that employees work—or be on an approved leave status—the day before and after a holiday in order to receive holiday pay. An employer may also require an employee to have worked for the company for a specified period of time before becoming eligible for holiday pay.