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Holiday pay: Separate fact from fiction

by on
in Centerpiece,Office Management,Payroll Management

gift wrapped with moneyAs the holiday season begins, so begins the inevitable answering of questions from confused employees regarding holiday pay issues. Typically, misconceptions abound, with employees mistakenly believing they are entitled to much more than they really are.

Below are some statements you might hear from employees (or even managers) regarding holiday pay issues. Few of these statements are correct. Let’s separate fact from fiction.

“Private employers are required to provide paid holidays.”

FICTION. The federal Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays (national or otherwise). Paid holidays are benefits that are generally optional for private employers, barring a collective bargaining agreement or contract that says otherwise.

Nonexempt employees are entitled to receive premium pay for any hours they work on a national holiday.”

FICTION. The FLSA requires only that employees be paid their regular rate for time worked on holidays. It does not require premium pay, nor does it require overtime pay if nonexempts work less than 40 hours in that workweek.

“Employers may not prohibit employees from comparing their holiday bonuses.”

FACT. Under the National Labor Rela­­tions Act, employees have the right to discuss their working conditions, which includes their pay. This applies to both unionized and non-unionized employees. 

“Nonexempt employees who have an unexcused absence from work either the day before or the day after a paid holiday forfeit their holiday pay under federal law.”

FICTION. Again, the FLSA does not address this issue. However, your organization may have a policy requiring employees to report to work the day before and the day after a holiday in order to receive holiday pay. 

“An employee who is out for an entire month on FMLA leave could be entitled to holiday pay, depending on company policy and past practice.”

FACT. An employee’s entitlement to holiday pay during a period of FMLA leave is determined by the employer’s established policy for providing such benefits when employees are on other forms of paid or unpaid leave.  

“If an employer handed out holiday bonuses in previous years, past practice dictates that holiday bonuses must be given this year, as well.”

FICTION. As long as you don’t make any promises beforehand, either implied or explicit, to pay bonuses, holiday bonuses are considered gifts that employers may choose to give or not.

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