Do you offer your employees holiday pay? Should you? What if the holiday falls on the weekend? If you want to be an incredible boss and an even better leader, offering your employees holiday pay is crucial to your success. Learn more about these essential practices and more with Hire LAB HR Specialist Leilani Quiray.
Employees really value their time off. And when they get paid for it, it’s just the icing on the cake! If you (the employer) can afford to provide paid time off in the form of holiday or vacation pay, then we really encourage that practice. Holiday and vacation pay are benefits offered by most companies that value their workforce. If you offer holiday pay, put it in your policies and communicate how employees can use this benefit. Be sure to specify any restrictions on use, eligibility requirements, etc. It is an agreement between employers and employees and is not subject to the Federals Labor Standards Act (FLSA). Guidance varies by state but generally, holidays and vacation pay are paid out in the same way, and any balance owed is paid out upon separation of employment as wages owed. So, be sure to check out your state’s laws on paying your non-exempt, hourly employees holiday pay.
There are several options you can take if a holiday lands on a weekend or lands on a day that the employee is scheduled and required to work. For example, if you are a zoo and are open on weekends, your zookeepers will be required to work on the weekends.
Generous holiday policies pay eligible employees on a day the company selects that it will “observe” the holiday. For example, if a holiday lands on a Saturday, you may choose to be closed on Friday. If it lands on Sunday, you may choose to be closed on Monday. In these situations, you are observing the holiday on Friday and Monday, respectively.
Make sure policies address if and how employees are eligible to receive holiday pay, even if they are not scheduled to work on the holiday.
If you cannot afford to be closed during the holiday, then you can just pay employees an extra 8 hours of holiday pay in addition to their regular pay if they’re required to work on the holiday. Eight hours for full-time and 4 hours for part-time employees – whatever you decide, put in your policies.
If operations permit, you can designate a holiday during the pay period in which the holiday occurs and have your employees take that day off with pay. We would not recommend allowing employees to “bank” or “float” their holidays – they should use them immediately or within the pay period in which the holiday is observed. This is a best practice because some states – California, for example, requires employers to treat “floating” holidays as vacation pay because you’ve allowed the employees to “accrue” (float/bank) the holiday, and use it as they would use their vacation time – thus subject to being paid out upon termination as per state legal requirements.
From a generous, best practice approach: YES. I think paying them in addition to their regular hours is generous and they’ll appreciate it since they’ll be stuck at work while everyone else is having a beer and celebrating! I would flesh this out in policies to make sure everyone is on board and understands restrictions or eligibility requirements for this benefit.
If you can afford it, YES – pay them as specified in policies – full-time vs. part-time pay. Remember, you closed the office due to a holiday, and I think they’ll really appreciate the time off and the pay!
At a minimum, they observe the major, national holidays and a couple of state-specific holidays. Their policies specify eligibility, pay amount (expressed in hours) for full-time (exempt and non-exempt), and part-time employees. Holiday and vacation pay are paid at the employee’s regular hourly rate. Holiday and vacation pay (and PTO or sick pay for that matter) are not factored into overtime calculations. See question #2 for information on what to do if the holiday falls on a weekend.
For businesses that cannot afford to pay holiday pay to all employees, simply close operations and give your employees the day off without pay. Or, alternately, only pay full-time employees or a subset of employees. You’ll need to look at your finances and develop your policies in your employee handbook to address each situation. Whenever possible, we encourage you to pay holiday pay.
A great approach is to tell your employers that you are considering adding a vacation and holiday benefit (send an email or solicit feedback through your regularly used channels of communication). Then, ask them if they have any thoughts or input that they’d like to share. Finally, roll-out your new policy and be sure to include any valid employee feedback you get in your employee handbook.
It’s important to get this step right. You don’t want to fall into the common trap of applying policies inconsistently, as this can lead to compliance issues and complaints of fairness.
A well-written employee handbook will address all of your work rules and policies and minimize your exposure to compliance issues.
As you know, creating an employee handbook can be a daunting task. The HR Specialists at be the change HR can help you develop your employee handbook to address your specific needs, including how to implement your vacation and holiday policy. Let the pros handle this task to make sure you have policies that are compliant with local, state, and federal legal requirements. Contact them today for a free 30-minute consult.