4 Holiday Pay Tips
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4 Holiday Pay Tips

As we get ready for the holidays, it is also important to understand the employment laws as related to holiday pay.

It is also a good time to update your employee manuals to reflect detailed policies on holiday pay. Practices should have a clear policy on what days employee will be able to take off and what type of pay they will receive for that time off.

Below are four tips that you should keep in mind in terms of holiday pay.

1. It is up to the practice to decide which holidays to observe as paid holidays.

The California Department of Industrial Relations specifies, “California law does not require that an employer provide its employees with paid holidays.” Federal and state employees have designated legal holidays. However, private employers determine which holidays to observe and whether they will be paid or unpaid. Should you choose to offer paid holidays, you decide which holidays will be observed and determine the eligibility requirements. You can also stipulate that a nonexempt employee be employed for a specified period of time prior to eligibility. It is good business practice to provide employees with a list of days the office will be closed for holidays and whether the employees will be paid during those closures. It is recommended to include your paid holiday policy, if any, in your employee manual and notify employees of any changes.

Note: It is recommended that you review and post this list annually, as some may fall on days the office is already closed, in which case you will want to decide whether to observe the holiday on an alternative day, and which day.

2. Inform employees that they will not be paid for holidays that fall on a weekend.

Unless there is an existing policy in place, California law does not require employers pay employees holiday pay if the employees do not work on those holidays. However, if an employer wishes to compensate an employee when a holiday falls on a day the office is typically closed, add language to the employee manual to address this situation. Often an employer will offer Friday as a holiday if the designated holiday falls on a Saturday or offer Monday as a holiday if the designated holiday falls on a Sunday.

3. Understand how to pay employees who have to work on a holiday.

There is nothing in California law that mandates an employer pay an employee a special premium for work performed on a holiday, Saturday or Sunday, other than overtime pay if the employee works more than 8 hours in a workday or 40 hours in a workweek. However, if other employees are given the holiday off with pay, California courts have held that you must make up the lost benefit to the employee in some manner. Some employers offer the employee another day off with pay or pay the employee for the hours worked plus an additional day of pay to reflect the holiday. Exempt employees (those employees exempt from federal overtime laws) who perform any work during the workweek in which a holiday occurs must be paid their full weekly salary, whether they work on the actual holiday or not, and whether or not the holiday is considered a paid holiday. Holiday policy should be included in the employee manual and should address what happens when an employee has to work on a day that was previously designated a paid holiday.

4. It is up to the employer to decide whether to close the practice on a holiday.

There is nothing in the California law that requires an employer to close business on any particular day. It is up to the employer to select which days, if any, to be closed for business. If an employer is open on a holiday and schedules an employee to work that day, there is nothing in the law that obligates an employer to pay anything beyond regular pay and any overtime hours worked.

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