We are quickly arriving at the Christmas/New Years holidays. Most of you have a good handle on this, but for some new managers, HR people and payroll people there may be some confusion in how people should be paid for the holidays. Here is some guidance from the FLSA. Some of you may be in states that have other regulations, such as California, so be aware of your local jurisdiction.
As we enter into the holiday time of the year I thought it would be constructive to address some myths about holiday pay. There are a lot of myths and misunderstandings that have developed about how and what people must be paid. Much of this comes from the past practices that people learned from working for unionized companies, nonunion companies trying to remain that way, or larger companies trying to compete for workers. Here are four common myths about holiday pay under the FLSA regarding paying employees.
Myth 1: Employers must pay for national holidays.
Truth: There is NO obligation under the FLSA for employers to pay for holidays, assuming that no work occurred on that holiday. If you sat home and enjoyed football games or went to white sales your employer is under no legal obligation under the FLSA to pay you for that time. However many employers do offer holiday pay even if no work is performed.
Myth 2: If I work a holiday my employer must pay me double time.
Truth: Double time is an artifact of union contracts or pay practices designed to get people to work times or jobs that were unpopular. Since there is no obligation to pay for holidays there certainly is no obligation to pay more for them either. Companies may opt to pay extra to people who work holidays and many companies have. But that does not mean they are required to.
Myth 3: If a paid holiday falls on my day off the company is still required to pay me for it.
Truth: Let’s see if you have been paying attention. The answer is NO. But many companies have adopted the practice of doing so.
Myth 4: Can an employer require an employee work on a holiday?
Unlike the other answers, this one is YES. If the nature of the business is such that it is necessary for it to be open then an employer can require employees to work, regardless of their exempt or nonexempt status. If you have been paying attention you know that no extra compensation is required. However, many companies have adopted policies to compensate people for working at these times.
It is important to note that that the first three myths only apply to nonexempt employees. Exempt employees are paid a salary, which must be paid to them for any work performed in a week. So if they work anytime in a week during which a holiday occurs they must be paid their entire salary.