Did You Know: There is no legal obligation to pay a premium to non-exempt employees for working on holidays?
Labor Day is going to fall on a Monday this year. Are you required by law to pay your drivers and staff overtime, per diems or double-time, if you have them work on the holiday?
State and federal laws recognize certain days as “holidays,” however, there is no law that requires private employers to provide a premium rate of pay for work on those days. These “holidays” are days that government offices are closed and do not provide the services that they normally would. As a result, the government provides the “holiday” designation to give people notice that services will not be available. This also allows employers an extra day to respond to official inquiries and/or to pay employees if a pay day falls on the holiday. Court due dates are extended as well.
While there is no legal obligation to do so, many employers choose to offer premium pay for work on governmental holidays as a benefit to their employees. However, that would is a matter of contract between the employer and the employee. Outside of such contract obligations (eg. union agreements, etc.) you have no legal obligation to pay your employees any differently for work on a “holiday” than you do for any other day of the year. If you operate a business that is open on a “holiday,” you may choose to pay your employees more for working on that particular day. However, any extra money you choose to pay your employees would be within your complete discretion since it is not required by either state or federal law. Similarly, you can choose to pay your employees even though they don’t work on the “holiday,” but you are not required by law to do so.
Exempt Employees are a Little Different
As a general rule, if your exempt employee works any part of a workweek, you must pay that individual his/her full salary for the entire workweek. In the case of a “holiday,” where the employer chooses to close the business for a day during the workweek, the employer still must pay exempt employees their full salary for the workweek without a deduction for the “holiday.”