What Is Holiday Pay and When Employees Get It

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Holiday pay is pay for holidays, like Christmas Day, or other time not worked when a business is closed or the employee is permitted to take holiday time off.

When Employees Are Paid for Holidays

If you work for the Federal Government, you'll get ten paid holidays each year. These holidays include New Year’s Day, Martin Luther King, Jr. Day, Washington’s Birthday, Memorial Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas.

Many state, local and private employers follow the same holiday schedule and also provide holiday days off or pay for working on a holiday as part of an employee compensation package. 

However, The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays. These benefits are generally an arrangement between an employer and an employee or the employee's representative i.e. a union or other collective bargaining agent. 

Employers are not required to pay extra (over and above your normal rate) for working on a holiday unless you have a contract that stipulates holiday pay. Companies aren't required to give you the holiday off from work either. 

“In Lieu of” Holidays 

Full-time employees are legally entitled to an “in lieu of” holiday when a holiday falls on a non-workday, such as a Saturday or Sunday. Depending on the employer, the holiday will be acknowledged on the closest workday before or after the non-workday, such as a Friday or Monday, for example.


In some cases where the Davis-Bacon and Related Acts are applicable, employers are required to pay certain workers holiday pay depending on their classification and contract. Similarly, government contracts like the McNamara O’Hara Service Contract (SCA) require holiday pay and benefits when the contracts surpass $2,500.


Read More: Vacation Pay | Paid Time Off

Also Known As: vacation pay, paid holidays

Examples: George was entitled to holiday pay from his employer for Memorial Day and Labor Day.

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