Holiday Pay Explained: What It Is, How It Works, U.S. Laws

Understanding holiday pay can be complicated. You might be wondering what the laws are on holiday pay. And what holidays are eligible for holiday pay. Plus many more questions that are absolutely valid as an employee.

Let’s jump into simplifying holiday pay and showing you how to understand holiday pay in the simplest way.

Table Of Contents

What Is Holiday Pay?

Holiday pay is when an employee is compensated for holidays when they are not actually present on the worksite. For example, Christmas Day. An employee is paid for a full 8 hour day even though they are at home for Christmas Day. This is what holiday pay is.

The laws regarding holiday pay are controlled under the Fair Labor Standards Act (FLSA).

Holiday pay is not a requirement for part-time employment. It is also not required for full-time employment. Though, majority of full-time employers pay for holiday pay because the employee is often paid an annual salary (regular pay not determined by working hours) and they are usually not on the worksite during the holidays.

Holiday pay is sometimes given to part-time employees as a benefit. If you are concerned about whether or not you will receive holiday pay as a part-time employee, you should ask your employer what their policies are regarding these days off.

How Much Is Holiday Pay?

Holiday pay is paid your regular compensation. For example, if you are paid $15 per hour, you will be compensated the equivalent of $15 per hour for your holiday pay. This is different than overtime pay, where you may receive additional compensation for working additional hours.

If you are paid an annual salary, your holiday pay will be the equivalent as well.

How Does Holiday Pay Work?

Holiday pay is included as part of your regular paycheck. Paychecks are usually made on 52-week terms, meaning you will be paid every two weeks. Holiday pay will be included along with your regular paycheck.

That means if, in your regular pay period, you are paid $1000. But during Christmas week you receive holiday pay, you will still be paid $1000 for your regular pay period during that holiday week.

What Holidays Are Considered Eligible For Holiday Pay?

Each employer will determine what they feel which holidays are eligible for holiday pay. Some employers follow “bank holidays” while other employers follow “market holidays”, and others follow their own list of holidays they are comfortable paying for.

Be sure to ask your employer what their policies are. But average paid holiday days in the U.S. are:

author: patrick algrim
About the author

Patrick Algrim is an experienced executive who has spent a number of years in Silicon Valley hiring and coaching some of the world’s most valuable technology teams.

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