In past years, when an employee has been required to come into
work on a company holiday, we have paid the employee time and a half for that
day, even if he or she didn’t work more than eight hours that day or 40 for the
whole week. As we head into the summer season and we’re a little short on
staff, some employees might unfortunately have to work on Independence Day or
Labor Day. So, I want to clarify our pay obligations. Must we pay a premium for
work on one of these holidays?
– Janet in Sacramento
Hours an employee works on a holiday or weekend don’t get special
treatment under wage and hour laws. Thus, you don’t have to pay a premium for
work on a holiday unless: 1) the employee works overtime on the holiday; 2) the
employee has already worked 40 hours in the workweek; 3) you have a policy
stating that employees will receive premium pay for work on a holiday; or 4)
you have a union contract requiring premium pay for holiday work.
A few more
considerations: First, if your organization has been paying a special rate for
holiday work but you now want to change that practice, it’s a good idea to give
employees advance notice of the change. Otherwise, an employee could have a
claim that an unwritten contract guaranteed premium pay. Second, if employees
get paid time off for certain holidays, you generally don’t have to include
that holiday time as “hours worked” for purposes of determining whether an
employee worked overtime that week. But if you require an employee to work on a
paid holiday, you must make up that lost benefit, such as by giving the
employee another paid day off or paying the employee his or her usual pay in
addition to the holiday pay. And, those worked hours will count for purposes of
figuring overtime, except that any extra compensation may be credited toward
weekly overtime due as long as you pay the employee at least 1½ times his or
her normal hourly rate for the holiday work.