Holiday Pay in California – Do Employers Have to Give It?

Posted on April 20, 2022

California employers are not legally required to give workers a paid day off for a holiday. They are also not legally required to pay extra for hours worked on a holiday. However, many employers choose to do so. If holiday pay is promised in the employment contract, the employer is then contractually obligated to follow through on that promise.

Do California employers have to provide paid time off for holidays?

No, there is no state law or federal employment law that requires employers in California to provide holiday pay or to give their employees time off during a holiday. However, many employers provide extra holiday pay or paid time off, anyway.

There are also no legal requirements that a business:

• close on a holiday, or
• give workers a day off for a holiday.

This means that employees do not always have legal recourse if their employer does not provide a paid day off for a holiday or if they are only paid their normal rate for hours worked on a holiday. It does not matter whether the worker is exempt or non-exempt. However, relevant overtime pay and minimum wage laws are still in effect for non-exempt employees.

For example: Brian is scheduled to work 10 hours on Christmas for his employer in the state of California. While he is not legally entitled to more than his regular rate of pay for the first 8 hours, he is entitled to 1.5 times his normal rate for the last 2 hours because he is working overtime.

The only time employers have to provide holiday pay or paid time off is if one of these arrangements is promised in the employment contract or collective bargaining agreement. If it is, then the employer is contractually obligated to provide it.

Are there any exceptions?

Yes, there is one exception. Many federal employees in the Executive agency who are working in California are legally entitled to holiday pay. For covered workers, any hour worked on a holiday is paid at twice their regular rate of pay.

This exception only applies to federal employees who work in the Executive branch. The Executive branch includes:

• government departments in the Executive branch,
• corporations controlled or owned by the federal government, and
• independent establishments or agencies within the Executive branch, like the Government Accountability Office (GAO).¹

All employees in these departments who have regular working schedules are entitled to double-time pay for hours worked on holidays.² This includes part-time employees.³ These workers do not have to rely on holiday pay provisions in their employment contracts.

However, there are exceptions to this exception. Not all Executive branch employees are entitled to holiday premium pay. Some of the Executive employees who are not entitled to holiday pay are:

• elected officials,
• heads of departments,
• employees working abroad and who are paid using local wage rates at their places of work,
• civilians on a Coast Guard vessel,
• lighthouse keepers,
• Senior Foreign Service members, and
• student employees.⁴

Why would employers choose to provide holiday pay?

Many employers voluntarily offer holiday benefits in California. They generally do so for one or several reasons. The most common reasons for offering holiday benefits are:

• it improves worker morale,
• current employees become more loyal to the company,
• job applicants are more likely to want to work for the company,
• studies have shown that paid time off for holidays increases worker productivity,⁵
• it decreases worker burnout,
• it can reduce worker turnover, and
• it draws better talent to the company.

For these reasons, many employers choose to offer holiday benefits to employees, even if they are not legally obligated to do so. That promise for holiday benefits can come in the:

• job offer,
• employment contract,
• employee handbook, or
• collective bargaining agreement.

Once offered, holiday benefits are contractually binding on the employer. If the employer promises holiday benefits but then does not provide them, employees can take legal action. They can file a complaint with the California Labor Board or file a wage and hour lawsuit in court.

What are the two ways employers can pay workers for holidays?

Employers generally use one of two ways to provide holiday benefits for their workers. They can either:

1. give workers a paid day off for the holiday, or
2. pay a premium rate for hours worked on the holiday.

Employers often have a list of holidays that they recognize. These holidays generally include:

• New Year’s Eve or New Year’s Day,
• Dr. Martin Luther King, Jr. Day,
• President’s Day,
• Memorial Day,
• July 4th or Independence Day,
• Labor Day,
• Columbus Day or Indigenous People’s Day,
• Veterans Day,
• Thanksgiving Day, and
• Christmas Eve or Christmas Day.

Some employers in California may also cover other specific holidays, like:

• Lincoln’s Birthday,
• Juneteenth, and
• Cesar Chavez Day.

Employers who provide a paid day off will usually give it on the holiday itself or, if the holiday falls on a weekend, on the preceding Friday or the next Monday. These employers are generally companies or businesses that can close on the holiday. By closing on the holiday, they can give all or at least most of the employees the workday off in the form of a paid holiday or vacation time.

Employers can also pay a premium rate for hours worked on a holiday. Some employers pay time-and-a-half, or 1.5 times the normal rate of pay. Others pay double time, or twice the regular rate. Still others have a company policy that offers a bonus if the employee works on a covered holiday. The precise arrangements of the employer’s policy will be set out in the employment contract. The extra pay generally comes on the next payday. The employers who opt for providing holiday pay are often businesses that cannot close on holidays, like:

• restaurants,
• retail stores, or
• grocery stores.

These stores often pay a premium rate for holiday hours worked in order to incentivize employees to work these high-demand hours. Some employees are willing or even eager to work during the holiday in order to earn more thanks to the extra pay. Additionally, not offering extra holiday pay can cause employees to quit in order to spend the particular holiday with their friends and family, rather than on the job. Losing workers right before the holiday season is often a worst case scenario for employers. Offering extra pay for holiday time rather than normal straight time can be the best way to keep this from happening.

What can I do if I am entitled to holiday pay but not getting it?

If the employment contract or collective bargaining agreement promises extra holiday pay or a day off, but the employer is not providing it, the employer can be breaching the employment contract. Aggrieved workers have legal recourse under California law.

Workers can file a complaint with the California Labor Board for a violation of California labor laws. This report can trigger an investigation by the Labor Commissioner’s Office.

Workers can also hire a labor attorney to file a lawsuit. This would demand compensation for the wages that should have been paid, but were not. If many employees have been deprived of their contractually promised holiday benefits, the lawsuit can be filed as a class action.

The best way to invoke your employee rights is to establish an attorney-client relationship with an employment lawyer and get his or her legal advice.

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