Ho-Ho-Ho Holiday Pay

Posted by: Gail Cecchettini Whaley, J.D. on Thursday, December 5, 2019

Requests for time off are common during December through January. Employers may find themselves faced with multiple vacation requests from employees and questions about pay.

Here are a few reminders about holidays and holiday pay for California employers:

1. Holidays Are Your Call. California employers are NOT required to provide employees with paid holidays, close their business on a holiday, give employees the day off for a particular holiday, or provide premium pay if an employee works on a holiday. It's up to your company policy (or collective bargaining agreement). That said, many employers do close up shop on certain holidays and some offer extra pay. Make sure your company's policies are clear as to which days are recognized holidays, whether those days are paid or unpaid, and whether any extra pay will be given if someone has to work.

2. Overtime is Based on Actual Time Worked. Let's say your company chooses to provide a paid holiday on a Monday. That week, Jeff, a nonexempt (hourly) employee, works Tuesday through Saturday, eight hours each day. Jeff is upset that he only receives straight time pay of 48 hours for that workweek and claims that eight hours should have been overtime. Is Jeff correct? No. The determination of whether overtime pay is due is based upon actual hours worked, over eight in a workday or more than 40 in a workweek. Since Jeff did not work on the holiday, did not work more than eight hours in any one workday, he didn't "work" more than 40 hours in the workweek and isn’t entitled to any overtime pay for the workweek.

3. Exempt Employees are Different. If the employee is available to work and the employer chooses to close for a holiday, the employer must pay exempt (salaried) employees their full salary for the workweek without deduction for the holiday. In most situations, a designated "holiday" has no effect on exempt employees.

4. What if Payday Falls on a Holiday? If an employer's normal payday coincides with a day the employer is closed for a specific holiday listed in the California Government Code, the employer can pay wages on the next business day. The holidays to which this rule applies are listed here. Of course, paying the day before the holiday is acceptable, as well.

5. Handle Time-Off Requests Consistently. There is no set requirement for deciding which employees' vacation requests to grant. Some employers have a first-come-first-serve policy or grant vacation requests based on seniority. Make sure employees are treated in a consistent and nondiscriminatory fashion—whichever method you choose. Communicate the method for granting vacation requests to your employees and train supervisors to evaluate requests consistent with that policy. Your employee handbook is the best place to list your policies. Remember to take into account requests for religious accommodation.

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