With the holidays around the corner, tis the season for a refresher on holiday pay laws and best practices!
In general, the Fair Labor Standards Act does not require private employers to provide holiday pay. There are certain rare exceptions for private employers with federal contracts who are covered by the labor standards of the McNamara O’Hara Service Contract Act and/or Davis-Bacon and Related Act.
In addition holiday pay is rarely regulated by states. At least two states have special provisions related to holidays. Rhode Island requires employers to pay employees who work on Sundays and holidays at a rate of at least one and one-half times their normal rate of pay. Certain employees, including agricultural workers, physicians, dentists, attorneys, accountants, health care workers, restaurant workers, hotel workers, supervisory employees and others, are exempt from this requirement. In Massachusetts, employers are subject to certain “Blue Laws,” which regulate businesses’ ability to operate on a holiday or a Sunday. For example, retail establishments and manufacturers are required to obtain a permit by local police to operate on certain holidays throughout the year.
In Michigan, employers are only obligated to provide holiday pay in accordance with its own policies. Below are some suggestions and best practices related to holidays:
- Your policy should specify which holidays the company recognizes, whether employees may be required to work on such holidays or not, whether a different holiday pay rate will be provided to employees working on a holiday, and whether there are any special conditions that an employee must meet in order to qualify for a premium holiday rate.
- Examples of useful conditions to add to your holiday pay policies include:
- Employees must work their last scheduled shift before the holiday and the first scheduled shift after the holiday in order to be eligible for holiday pay.
- Employees must be in good standing in order to be eligible for holiday pay. “Good standing” means that the employee has not had a final written warning issued within the three (3) months prior to the holiday.
- Employers should specify which a paid, but non-worked holiday, will or will not count towards overtime calculations.
- Employers should enforce holiday pay policies consistently and equally for all employees. Failure to do so could put an employer at risk of a potential discrimination or retaliation claim.