Q One of our employees is assigned to work 32 hours per week. His regular off-day is Monday. If a holiday falls on a Monday (such as Labor Day), is the employee entitled to pay for the day?
A Neither federal nor state law requires you to pay employees for holidays unless they “perform work” on that day. Additionally, employers do not have to pay nonexempt workers premium wages (e.g., time-and-a-half or double time) for hours worked on a holiday unless the employee is entitled to overtime because he or she has already worked 40 hours in the workweek.
Although the law does not require employers to establish particular pay practices with regard to holidays, employers should note that any existing written agreements (including statements in employee handbooks and other materials), as well as a custom or practice of paying workers for certain holidays, could create a contractual obligation to pay employees for unworked holidays. Accordingly, employers should be careful when implementing or altering holiday pay practices.