Do you have employees who will be working on a holiday? Who is eligible for this time off? How much extra do you pay for working on a holiday? 

This article answers these questions and more to assist you in determining the best holiday pay policy within your organization. 

Definition of Holiday Pay

Holiday pay or sometimes referred to as paid time off is any alternative compensation an employer offers employees during holidays. This additional pay could be in the form of time-and-a-half when working on a holiday or being paid for the day when not working.

There are eleven federal holidays observed by the US government. While most government offices are closed these days, many small businesses choose to operate “business as usual.” 

The FLSA or Fair Labor Standards Act does not require payment to employees who do not work during vacations or holidays. This type of paid time off is an agreement between an employer and an employee and is documented before that employee’s first day of work.

Likewise, companies are not required by law to pay extra for regular work hours. Holiday pay is considered a benefit to employees and is entirely voluntary. Sometimes an employer will pay time and a half or double time for individuals who end up working on a holiday, but this is not required.  

That being said, restaurants’ and retailers’ demand for labor is at an all-time high. It is now highly encouraged to pay employees time-and-a-half or double time when working a holiday shift. 

2022 Holiday Schedule

Here are the dates for the 2022 national holidays.

Holiday Pay Table for 2022 Holiday Schedule

When a holiday falls on a weekend, that holiday usually is observed on the following Monday or preceding Friday.

Eligibility

Anyone who works on a holiday is required to be paid their standard rate of pay. Most often, there is consistency in the paid time off system for all full-time employees. 

An employee should understand the paid holidays a company offers before accepting the position. You do not want to be surprised when a holiday rolls around, and you are required to work or learn you are not paid for this time off. 

Contractors and consultants are not subject to holiday pay or any other type of paid time off given to regular employees. Exceptions may be made given in their contractual agreements. 

Part-Time or Seasonal Employees

Since companies are not legally required to provide paid time off for any full-time worker, part-time and seasonal employees are treated the same. Organizations are required to detail their holiday policy in their employee handbook. 

Most companies outline the pay structure for both seasonal and part-time employees. Paying more, even double or triple during the holidays, incentivizes employees to work during these busy periods.

Employers feel more compelled to provide better benefits to all employees in a competitive economy to prevent individuals from jumping ship for a better offer. 

Providing Benefits to a Small Business

A fundamental part of just about any compensation package in this very competitive environment is time-off benefits. Employers can provide vacation and holiday pay to their employees even though this isn’t a federal requirement for all businesses.

Currently, many organizations are struggling to fill career openings. These prevalent openings force companies to compete for local and international talent and make paid time off a standard and consistent practice. 

Even better, studies show that workers who are paid for holidays show increased productivity, morale and feel more valued at work. Paid holidays can be a major motivator to employees since they know that they will be given days to rest without losing out on wages.

For a majority of small businesses, customer needs take top priority. However, this doesn’t leave much time for self-care, which is why holiday pay is so important. It is a chance to relax and recharge while increasing output and overall job satisfaction. 

 

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