With the holiday season upon us it is important that employers understand wage and hour obligations associated with holiday pay and the impact of holiday closures.
California law makes no special provision for holiday pay; holidays, like Saturdays and Sundays, are treated like any other workday. As always, the focus in California is on making sure employees are paid for all hours worked – including overtime – irrespective of the “day” the work is performed. There is no statutory provision mandating an employer provide holiday pay to an employee when a holiday happens to fall on a regularly scheduled workday.[i] However, there is also nothing that prevents an employer from offering holiday pay as a benefit or though the collective bargaining process.
The same applies in other of our member states (Arizona, Colorado, and New Mexico) where the focus is also on assuring payment of wages for all hours worked and the correct calculation of overtime.[ii]
It is also important to note that holidays can impact the timely payment of wages. Under California law, if the holiday falls on the company’s regularly scheduled payday, employers may shift the payment of wages to the next business day after the holiday. The California Secretary of State’s website provides a listing of state holidays. Bank holidays can vary from state to state. Employers outside of California should check which Bank holidays may impact the payment of wages in their states.
[i] Employers who provide holiday pay should keep in mind that they are not required (under state or federal law) to factor in hours paid for the non-working holiday when calculating overtime for the pay period.
[ii] All states remain subject to the Fair Labor Standards Act, which also does not require premium pay for hours worked on holidays.