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Holidays: To Pay Or Not To Pay?

American employers are not required to pay employees for time not worked, including vacations and holidays.

However, employers are increasingly in competition with each other over hiring & retaining the best talent.

Offering staff a generous holiday pay package for celebratory time off is one way for a company to stand out as a desirable employer.

As holidays approach, it’s a good idea to review your organization’s holiday pay practices.

Do you have a paid holiday schedule and if so, which holidays will be paid and which will not?

Will the office be closed on those days?

Must an on-call schedule be implemented in case someone is needed on a recognized holiday? Or, perhaps you’ll need to schedule a skeleton crew?

Of course, some jobs require that employees work on holidays. Industries that provide 24/7 customer service, for example, or businesses that schedule according to capacity and customer demand. In these cases, employers sometimes reward holiday workers to help them feel better about working on holidays with additional compensation in the form of time-and-a-half or double-time pay.

In 2016, the WorldatWork Associated conducted a study of paid time off that showed the norm in the U.S. was 9 paid holidays. Of course, these vary by company to meet employee and business needs.

The most common paid holidays are:

  • New Year’s Day
  • Easter
  • Memorial Day
  • Independence Day
  • Labor Day
  • Thanksgiving Day
  • Friday after Thanksgiving
  • Christmas Day

Some companies use regional practices and employee feedback when considering the addition of other holidays to their paid schedule including:

  • President’s Day
  • Good Friday
  • Martin Luther King, Jr.’s Birthday
  • Veteran’s Day
  • Columbus Day
  • Christmas Eve
  • New Year’s Eve

Sometimes, an organization offers paid holidays for employees even on their birthday or Election Day.

Other companies offer “floating holidays” or “personal days” that an employee can take at his or her discretion. Workers can use the floating holidays to cover their birthday, religious or cultural celebrations, memorials, extended weekends, and more.

Although the government does not require employers to give workers paid holidays, they have designated their own 9 Federal paid holidays. Many public sector companies, states, and local governments follow the Federal holiday schedule:

  • New Year’s Day
  • Martin Luther King, Jr.’s Birthday
  • Washington’s Birthday
  • Memorial Day
  • Labor Day
  • Columbus Day
  • Veterans Day
  • Thanksgiving Day
  • Christmas Day

In the event that a holiday falls on a non-workday, assuming that workers are on a Monday through Friday schedule, the holiday is usually observed on Monday if the holiday falls on Sunday, and then on Friday if the holiday falls on Saturday.

Every organization wants to employee superior workers. To attract and retain them, employers must offer benefit options that meet or exceed the norm.

The key is to know and reconcile what your employees want with business and demand needs.


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