Rules Regarding Employees and Holiday Pay

There is nothing like waking up in the morning to the realization that you don’t have to go in to work today because your office is closed in observation of a holiday. While most of us enjoy these little treats scattered throughout the year, not everyone is in the same boat. Many businesses, such as dental offices, retail stores and restaurants, remain open on recognized holidays for the specific reason of attracting those clientele and customers who have holidays off from work. This means, most employees of service providing businesses have to work on holidays. This brings up an interesting question, what is the law in California with regards to holiday pay?

In California, hours worked on holidays are treated like hours worked on any other day of the week. This means that for non-exempt employees (those who receive overtime pay) need only be paid their regular hourly rate despite the fact that they are working on a holiday. Of course rules regarding overtime hours still apply, i.e. any hours worked beyond 8 hours a day, or 40 hours a week, including holidays, must be compensated at the premium rate of time and a half the employee’s regular hourly rate.

It is within the sole discretion of the employer to open or close their business. There is no law in California that requires an employer to close its business on any particular day. Accordingly, if an employer chooses to keep their business open, there is no law that obligates the employer to pay the employee anything more than regular pay and any overtime pay for all overtime hours, even if that day happens to fall on a holiday.

Similarly, there is no law in California that requires an employer to pay an employee a special premium for hours worked on a holiday, other than overtime pay for all overtime hours worked. Unless there is a policy or practice of the employer of paying a premium rate for hours worked on a holiday, the employer is only required to pay an employee their regular rate of pay for all straight time hours worked on a holiday, and overtime pay for all overtime hours worked on a holiday.

For exempt employees (those who do not receive overtime pay), because they are paid on a salary basis, these employees must be paid their full weekly salary regardless of whether they work any hours during the week in which a holiday falls.

Make sure to take a look at your employee manual (or collective bargaining agreement, for union employees) to determine whether holiday premium pay has been negotiated for.

In sum, there is no law in California that requires an employer to pay a non-exempt employee more than the employee’s regular hourly rate for work performed on a holiday, other than overtime premium for work performed in excess of eight (8) hours a day or forty (40) hours a week.

For more information about holiday pay and other wage and hour matters, please contact Vincent Tong of TONG LAW.