Holiday Pay Laws: Everything You Need To Know

Danika McClure
Holiday Pay Laws
Reading Time: 3 minutes

Holiday pay is a benefit that employers offer to employees that helps with recruitment, employee happiness, and retention. For professional positions especially, competitive holiday pay and vacation time can help employers obtain the best possible talent.

However, while holiday pay is a great benefit, in many instances, employers are not required to offer holiday pay for their employees. Below we cover the basics of holiday pay and what that means for you as an employee.

What Is Holiday Pay?

Employees often wonder if they are required to work on holidays, if they will receive overtime for their work, and how much overtime they are entitled to. The answers are complicated and there is no one response that covers all employees.

Holiday pay and workplace requirements vary from employer-to-employer and are largely dependent on whether you work in the public or private sector.

The Fair Labor Standards Act (FLSA) does not require payment for time not worked, which includes vacations or holidays, even if they are federally mandated. Instead, these benefits are generally determined by your employer. Some employers are given paid time off, others are given days off without pay. In positions where employees are not guaranteed time off, pay can be increased to incentivise workers to come in, while in others a pay increase is not given.

Federal Holiday Pay Laws

The FLSA does not mandate specific or universal rules when it comes to holiday pay in the public or private sector. Employees who work for the Federal Government receive ten paid holidays per year. All other public and private sector positions are subject to state law, union rules, contracts, and employer discretion.

Federal Holidays

There are a number of Federal holidays that have been established by law in the United States. Some of these holidays are fixed, meaning that they are observed on the same calendar date each year. Others occur on the same day of the week each year. These holidays include:

  • New Year’s Day (January 1)
  • Birthday of Martin Luther King Jr. (Third Monday in January)
  • Birthday of President George Washington (Third Monday in February)
  • Memorial Day (Last Monday in May)
  • Independence Day (July 4)
  • Labor Day (First Monday in September)
  • Columbus Day (Second Monday in October)
  • Veterans Day (November 11)
  • Thanksgiving Day (Fourth Thursday in November)
  • Christmas Day (December 25)

In addition, certain federal employees are eligible to have a paid holiday on the day the president is inaugurated. Full time employees are also eligible for “in lieu of” holidays if any of these holidays falls on a non-work day. This will usually be taken on the closest workday before or after the holiday.

Many private employers follow this same holiday schedule and provide these days off/holiday pay should you work on that day. It is not required that your employer give you time off, nor is it required that they pay you more than your additional wage unless you have worked over the mandated 40 hour workweek, however.

How Much Is Holiday Pay?

There is no national standard for holiday pay. If you are a member of a union, are covered by a collective bargaining agreement or state law, your pay rate will be determined in those agreements.

Many employers, especially those who work in essential industries, such as health care, will offer payment-based incentives for individuals to work on holidays. Generally speaking, it’s all dependent on your employer, the contracts that apply to you in your position, and the industry you’re a part of.

Holiday Pay and Overtime

If you work overtime by accepting a shift on a holiday, and are entitled to overtime pay based on FLSA rules, you will be compensated at your overtime rate. Typically this is at a rate of time and a half of your normal wage.

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