As compared to many other highly industrialized countries, the United States does not have any “national holidays” regulations requiring private employers to offer paid holidays. However, the United States, through the U.S. Congress, has created several “federal” holidays for federal institutions and employees. Federal holidays include New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day ,Veterans Day, Thanksgiving Day and Christmas Day. Federal law cannot force state, municipal or other local governments to observe or recognize federal holidays in any ways. Although most states do recognize all federal holidays, there are exceptions such as when Arizona and New Hampshire refused to establish Martin Luther King Jr. Day as a legal holiday until well after all other U.S. states did so. In addition, there are various state and local holidays such as Patriots Day in Massachusetts, Pulaski Day in Chicago and Cesar Chavez Day in California.
As in most U.S. states, California private employers are not required to provide paid time off or premium pay when employees work on a designated holiday when the business is closed. If an employee works on a holiday, the employee is paid their usual rate of pay unless it is the employer’s policy to pay extra rates such as time-and-one half. Also, California law does not require the employer to pay any additional pay if an employee works on the day of a holiday unless it’s part of their common practice or if the employee has worked during a weekday. California law, in addition, does not require its employers to close for business on any holiday or to give their employees the day off for a particular holiday.
Even though there is not federal or state regulations requiring private sector employers to provide paid holidays, it is a common practice for employers to provide between eight and 10 paid holidays per year. According to the U.S. Bureau of Labor Statistics in 2009, an average of eight paid holidays were provided to 77% of private industry workers in the United States.
The following are some key points to remember for handling holiday pay in California:
- Premium Pay. A private sector employer is not required to treat a holiday any differently than any other workday. There is no requirement for an employer to pay a higher rate of pay or provide time off, with or without pay. Unless required by union contract, private sector employers have the discretion to provide holiday pay as well as provide or not provide a premium payment when an employee works on a holiday. In addition, the employer can set out rules for holiday pay such as requiring the employee to work the day before and day after the holiday to receive the holiday pay.
- Overtime. Paid holidays are not considered “hours worked” and are not included when calculating overtime. For example, a Monday is a paid holiday and an employee works eight hours per day, Tuesday through Saturday. There would be no overtime for the employee in that workweek. The employee would be paid eight hours of holiday pay and 40 hours of straight-time pay.
- Working on a Holiday. If an employer provides for holiday pay and an employee is required to work on a company holiday, the employee would be entitled to at least eight hours of holiday pay and pay for hours worked during the holiday. Making holiday pay to floating holiday/personal day may be possible, but need careful practice due to the relationship with regulations.