Do salaried employees get holiday pay? A Labor Lawyer Explains

There is no distinction between salaried (exempt) and hourly (non-exempt) workers when it comes to the law of holiday pay. Both types of employees are only entitled to PTO (or premium holiday pay) if their employer offers it as a matter of company policy.

There are no state or federal laws that mandate holiday pay. However, if your employer does offer it, then you have a contractual right to it. If your employer made such a promise but is not fulfilling it, you can bring a labor claim or lawsuit.

Below I explain what you need to know about holiday pay for salaried employees.

Employer Obligations

There are no laws that require private employers to provide salaried workers with paid time off for holidays. There are very few exceptions to this rule.

The federal law that covers most workplace rights, the Fair Labor Standards Act (FLSA), does not require holiday pay. Instead, it leaves the issue to state employment laws.

The overwhelming majority of states, however, have also refused to require holiday pay.

This has left the issue up to employers. Even though they are not legally required to provide paid time off (PTO) for holidays, many employers elect to provide it. When they do, the terms of the PTO will be in the employment contract or employee handbook. If your employer provides holiday pay in the contract, you are contractually entitled to receive it. It is a part of your employee benefits package.

Exceptions

Starting in 2023, there are only three exceptions to the rule that workers are not legally entitled to holiday pay or legal protections for holidays:

• certain employees in the Executive Branch of the federal government,
• Massachusetts, and
• Rhode Island.

Certain Federal Employees

Federal law requires certain federal employees to be paid at twice their regular rate of pay for hours worked on a federal holiday.¹ Covered federal employees are those who work in:

• departments within the Executive Branch,
• corporations owned or controlled by the federal government, or
• independent agencies or other establishments in the Executive Branch, such as the Government Accountability Office (GAO).²

These workers are entitled to double-time pay if they work during the holidays. It includes part-time employees as well as full-time employees. However, it does not include certain roles, such as:

• heads of departments,
• elected officials,
• members of the Senior Foreign Service,
• civilians working on a Coast Guard vessel,
• employees who are working abroad and are paid using local rules,
• lighthouse keepers, and
• student employees.³

Massachusetts

In Massachusetts, retail workers are protected from retaliation for refusing to work on the following holidays:

• Columbus Day or Indigenous Peoples’ Day,
• Veterans Day, and
• New Year’s Day.⁴

However, only some of these covered retail workers are salaried employees. Most are non-exempt employees who earn an hourly rate.

These workers were also entitled to premium pay during these holidays. However, recent changes to the law phased out the premium payments and they will end on January 1, 2023.⁵

Rhode Island

In Rhode Island, many employees receive premium pay for working the following holidays:

• New Year’s Day,
• Memorial Day,
• Independence Day or July 4th,
• Victory Day, which is held on the second Monday in August to commemorate the end of World War II and is unique to Rhode Island,⁶
• Labor Day,
• Columbus Day or Indigenous Peoples’ Day,
• Veterans Day,
• Thanksgiving Day, and
• Christmas Day.⁷

Similar to overtime pay, employees who work on these days are entitled to one and one-half (1.5) times their regular pay. They are also entitled to refuse to work on these holidays without repercussions.⁸

However, certain employees are exempted from this entitlement, such as:

• commercial fishermen,
• farmers,
• healthcare workers,
• lawyers, and
• many types of hospitality workers.⁹

Many other salaried employees are covered, though.

Only two states, Massachusetts and Rhode Island, have state laws protecting workers on the holidays.

Elective Holiday Pay

While private employers are not legally required to provide PTO for holidays, many still choose to do so. When your employer’s policy provides paid holidays, it is generally included in the employment contract or, if its workers are unionized, in the collective bargaining agreement. Most holiday provisions are found in the sections detailing employee benefits.

Benefits of Holiday Pay

Employers often offer paid holidays to salaried employees in order to:

• attract better talent,
• reduce turnover,
• improve workplace morale,
• lower worker burnout, and
• increase worker loyalty to the company.

Additionally, one study has shown that providing paid time off for holidays increases productivity.¹⁰

Types of Holiday Pay

Employers can provide salaried employees with holiday pay in two different ways:

1. with a bonus or extra pay for the hours that the employee works on the covered holiday, and/or
2. paid time off at your regular rate.

For salaried employees, straight PTO is more common than premium pay. However, some employers may let you choose which option you prefer.

Generally, employee handbooks will include a list of recognized holidays. This may match the list of federal holidays or may include others, like:

• President’s Day,
• Juneteenth, or
• Martin Luther King, Jr. Day.

If the holiday falls on a weekend, the paid day off would be:

• on the Friday before the weekend, or
• the Monday after it.

Religious Holidays

Employers are not legally required to provide paid time off for religious holidays. However, they can choose to do so in the employment contract.

Some examples of religious holidays include:

• Yom Kippur,
• Diwali,
• Lunar New Year,
• Ramadan, and
• Good Friday.

Employers must, however, make reasonable accommodations for your religious beliefs if they would not create an undue hardship for the company. If your employer does not adequately accommodate your religion, it can amount to religious discrimination. A couple of examples of reasonable accommodations are company policies to:

• schedule your workweek around religious holidays, or
• let you take a paid work day off for the holiday by using your sick leave or vacation time.

Remedies

If your employer promised you a holiday pay policy but you are not getting any, it may be a breach of your employment contract. You have legal options.

Most states have a Department of Labor that investigates complaints of labor law violations. You can file a complaint with them to get the government agency to investigate. For example, if you work in California, the Labor Commissioner’s Office at the California Division of Labor Standards Enforcement (DLSE) takes complaints from aggrieved workers.

You can also file a lawsuit. The lawsuit would demand compensation for the pay that you should have received. These lawsuits frequently expand into class actions if your coworkers are also being deprived of their holiday pay.

California law does not require holiday pay.

Frequently Asked Questions for California Workers

Do salaried employees get paid when the office closes for a holiday in California?

Usually yes. Exempt salaried employees generally must receive their full weekly salary for any week in which they perform work, even if the employer closes for a holiday during that week. However, employers may require employees to use available vacation or PTO to cover the holiday, provided the employee still receives their full salary.

Can a California employer require salaried employees to use PTO for a holiday?

Generally yes. Employers may require exempt salaried employees to use accrued vacation or PTO for a holiday closure. If the employee has no PTO available, the employer typically must still pay the employee’s full salary for any week in which the employee performs work.

Do salaried employees get extra pay for working on Christmas, Thanksgiving, or other holidays?

Not usually. California law does not require premium holiday pay for exempt salaried employees who work on holidays. Whether an employee receives additional compensation depends on the employer’s policies, employment contract, or collective bargaining agreement.

Is holiday pay required by California law?

No. California law does not require private employers to provide paid holidays or holiday premium pay. Employers may voluntarily offer holiday benefits through company policies, employment agreements, or collective bargaining agreements.

Can an employer change its holiday pay policy in California?

In many cases, yes. Employers generally may revise holiday-pay policies going forward if they provide appropriate notice and comply with any contractual obligations. However, employers usually cannot retroactively take away holiday pay that employees have already earned.

Can a company handbook create a right to holiday pay?

Potentially. An employer that promises holiday pay through an employment contract, collective bargaining agreement, or binding company policy may be required to honor that promise. Whether a handbook provision creates an enforceable obligation depends on the wording of the policy and the surrounding circumstances.

Do new employees qualify for holiday pay in California?

It depends on the employer’s policy. Some employers provide holiday pay immediately, while others require employees to complete a probationary period or satisfy other eligibility requirements before receiving holiday benefits.

What happens if a holiday falls on a weekend?

California law does not require employers to provide an alternative day off when a holiday falls on a weekend. However, many employers voluntarily observe the holiday on the preceding Friday or following Monday under their internal policies.

Can an employer refuse to accommodate a religious holiday?

Not necessarily. Under California’s Fair Employment and Housing Act (FEHA), employers generally must reasonably accommodate an employee’s sincerely held religious beliefs and observances unless doing so would create an undue hardship on the business.

Can I be fired for asking for a religious holiday off?

Generally no. California law prohibits employers from retaliating against employees for requesting a reasonable religious accommodation. Employees who experience retaliation may have legal remedies under the Fair Employment and Housing Act.

Do federal holidays have special pay rules for California employees?

Not for most private-sector employees. Federal holidays primarily affect federal government employees. Private California employers generally are not required to provide paid holidays or premium pay simply because a day is designated as a federal holiday.

Can salaried employees lose pay for a holiday closure?

Usually not if they are exempt employees who worked during that workweek. Federal and California wage laws generally require exempt employees to receive their full salary for any week in which they perform work, subject to limited exceptions.

Additional Reading

For more in-depth information, refer to these scholarly articles:

• Resolving Holiday Pay Disputes in Labor Arbitration – Case Western Reserve Law Review.
• No-Vacation Nation Revisited – Center for Economic and Policy Research survey of various countries’ holiday pay policies.
• Variations in holidays, vacations, and area pay levels – Monthly Labor Journal.
• Recent Growth of Paid Leisure for U.S. Workers – Monthly Labor Journal.