Employer-paid holidays (information, advice and possible options)

Employer-paid holidays are days employees receive off while still getting paid their standard wage for the day. It is common for employers to offer paid holidays as part of a more-extensive benefits package that includes other time off benefits, like sick leave, family leave, and vacation time. Most employer-paid holidays are holidays recognized by state and federal governments.

Learn more about employer-paid holidays in the U.S., including how they work and the most common ones offered.

What are employer-paid holidays based on?

Employer-paid holidays are religious, state, and national holidays an employer can choose to give to their workforce as paid days off. Some are political in nature, whereas others are religious.

There are no federal laws governed by the Department of Labor that require companies to give employees paid holidays — the Fair Labor Standards Act (FLSA) only regulates fair pay practices, including overtime pay and minimum wage. In 2018, more than 75% of civilian workers received paid holidays.

Why do employers offer paid holidays?

There are several reasons an employer might offer paid holidays. In a competitive job market, employers need to offer a well-rounded benefits package to attract and retain top talent. Paid leave is one of the top benefits the workforce deems important to have, according to the Society for Human Resource Management (SHRM). Many employees — more than 80% according to a Fractl survey — would even take a pay cut for a job with better benefits, including better leave and time off benefits.

There are additional benefits for employers who offer paid holidays. A time-off survey from SHRM showed that paid time off, like paid holidays, correlates with:

• Increased productivity
• Improved physical wellness
• Positive employer brand
• Increased employee engagement

In most instances, holidays are not mandated by law, with a couple of exceptions. Massachusetts and Rhode Island have state holidays that private-sector employers are required to offer as days off. There are also some instances where public sector employers are required to grant certain federal and state holidays as days off or offer premium pay for work on the day.

How does an employer-paid holiday work?

Employer-paid holidays are just that — holidays where the employee has the day off and still gets paid. Similar to the fact that there are no federal laws that require private employers to offer paid holidays, there are no federal laws that indicate how much an employer must pay an employee for a holiday. Typically, the employee gets paid their standard wage when they have an employer-paid holiday.

Whether an employee is exempt, non-exempt, or hourly does not affect the eligibility or pay determination since the FLSA does not require businesses to offer paid holidays to their employees. It is up to the employer to determine what holidays will be days off and if they will be paid or not. Regarding overtime pay for hourly and non-exempt employees, holidays are not considered any different than any other typical workday, from a legal standpoint.

If the employee works on a holiday and – based on the FLSA – would reach the overtime pay threshold, they would be entitled to overtime for their work, but that has nothing to do with the fact that the day is a holiday.

Many employers do opt to grant premium pay to employees who work on scheduled employer-paid holidays, including exempt employees. Common discretionary overtime pay for employees ranges from time and a half to double time. In lieu of overtime pay, some employers allow employees to take comp time or another day off during the year if they are scheduled to work on a holiday.

What are common employer-paid holidays?

According to the Bureau of Labor Statistics (BLS), U.S. workers receive an average of eight paid holidays annually, with three out of four employees receiving paid holidays. Private, public, and government employers almost always offer six standard paid holidays, including:

• Christmas Day
• Thanksgiving Day
• Labor Day
• Independence Day
• Memorial Day
• New Year’s Day

The federal government, as well as many other organizations, also recognize the following holidays:

• Veterans Day
• Columbus Day
• Washington’s Birthday
• Martin Luther King, Jr. Day

Additional paid holidays that many companies offer include:

• New Year’s Eve
• Christmas Eve
• Friday after Thanksgiving Day
• Easter
• Good Friday

Some states, like Texas, recognize certain days of the year, such as the state’s independence day, as a state holiday, and it is common for employers to grant the day off with pay. When holidays fall on a weekend, the holiday is generally observed as a day off on the preceding Friday or following Monday.

In addition to scheduled paid holidays, some companies offer one to two floating holidays or personal holidays as a paid day off that an employee can use at any point during the year. Other employers provide employees with a paid day off for their birthdays, and during election years, employers frequently allow employees to take at least a few hours off for Election Day.

Can I negotiate for paid holidays?

Employees expect paid holidays to accompany their compensation and benefits package. In some instances, it might be possible for candidates to negotiate additional paid holidays, especially for hard-to-fill positions. It might also be possible for a candidate to negotiate other types of paid time off if additional holidays are not available. For example, employees might negotiate vacation, sick leave, PTO, and parental leave.

Full-time employees are typically eligible for benefits, such as paid holidays, within an organization, regardless of their FLSA classification. Some companies provide paid holidays to part-time employees, as well.

Note: Consultants and contractors are not considered employees of an organization, and therefore, they are not eligible for paid holidays. However, if they work for a contracting firm, the firm that contracts them might offer them paid holidays.

Paid holidays are a common practice

Employer-paid holidays are not generally required by law and vary between organizations.

However, most organizations offer paid holidays as part of an employee’s overall compensation and benefits package. Paid holidays are an expectation of employees and candidates, and therefore are a requirement in most instances for employers who wish to remain competitive in the job market.