Compensation, Compensation Administration, Compensation Planning

Premium Pay for Holidays a Popular Benefit, SHRM Says

More than half of employers provide employees with premium pay when they work holidays, a recent Society for Human Resource Management (SHRM) survey found.

Holidays

According to SHRM, 57% of responding organizations pay a premium to employees working on a holiday when the company normally would be closed. One percent said they don’t offer premium pay but plan to start doing so in the next year.

Of these organizations, 40% pay double-time. Twenty-one percent reported paying time-and-a-half, while 19% described their benefit as “overtime.” Twenty-one percent said they paid some other type of premium.

The Fair Labor Standards Act (FLSA) does not require holiday premiums and, if an employer chooses to pay such premiums, the law permits it to exclude the extra compensation from overtime calculations. The FLSA even permits employers to use the extra pay to offset other overtime due (29 U.S.C. §207(h)).

Holiday Scheduling

SHRM’s survey also looked at scheduling. Less than one-third of respondents (30%) said their companies offered employees floating holidays.

Even fewer said they allow employees to swap holidays. The survey asked whether employees could, for example, request to work on Christmas in exchange for taking off Yom Kippur or Chinese New Year. Eighty-two percent said they prohibited full-time employees from doing so; 88% said the same of part-time employees.

The survey also looked at specific holidays and found that Thanksgiving Day is the most likely day for employers to close—97% reported that they will do so in 2017. New Year’s Day and Christmas were next, followed by Labor Day. The most likely day for employers to close early was the day before Thanksgiving.

The majority of organizations (90% or more) will close for the following 2017 holidays:

  • New Year’s Day (Sunday, January 1)
  • Memorial Day (Monday, May 29)
  • Independence Day (Tuesday, July 4)
  • Labor Day (Monday, September 4)
  • Thanksgiving Day (Thursday, November 23)
  • Christmas Day (Monday, December 25)

And while 84% of respondents said their workplaces will remain open the week between Christmas and New Year’s Day, 15% said they will close.

The report was created from the responses of 415 randomly selected SHRM members. The survey took place in September and collected answers from large and small companies across a range of industries. The full report is available here.