written by: Vikas Vij•edited by: Elizabeth Wistrom•updated: 12/1/2010
Concerned about the rules regarding salaried personnel and holiday pay? Check out the legal requirements and industry norms with regarding to holiday pay for exempt employees.
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Holiday Pay for Exempt Employees
Holiday pay refers to compensation for specific days when the business operations may be closed, or the employee is allowed to take time off from work for any reasons, such as a vacation. For instance, if the business is closed on Christmas Day, it would entitle the employees to receive pay for that day. The Fair Labor Standards Act (FLSA) has not stipulated any conditions for salaried personnel and holiday pay. Any agreement on pay for holidays must be reached mutually between the employee and the management, and the FLSA has no role to play in it. If the employer refuses to provide time off to the employees, there is no federal law to regulate this decision of the employer.
Salaried Personnel and Holiday Pay
Exempt employees, or the salaried personnel who are not entitled to receiving overtime, will receive holiday pay if the employer gives them a day off out of his own choice. However, it should be noted that non-exempt employees, who receive hourly pay, are not entitled to holiday pay. Such employees will be paid only for the hours actually worked.
The employer can also attach conditions to the receipt of holiday pay. Some companies may have the policy that requires employees to work on a day preceding and succeeding the holiday in order to receive holiday pay. There may also be eligibility conditions for the salaried personnel such as they must have worked for a minimum period with the company before being entitled to holiday pay. Part time employees may be entitled to holiday pay on a pro rata basis. Any such conditions should be mutually agreed between the employee and employer and become a part of the employment contract.
Holiday Coinciding with Employee’s Day Off
There may be a situation where a holiday falls on a date which is the employee’s day off. As per the law, it is not incumbent upon the employer to compensate the employee for this situation. However, many companies provide their employees with the choice of having another day off when the official holiday falls on the employee’s day off.
Some companies are officially closed on Saturday and Sunday. So if an official holiday is falling on either of these days, the company may decide to compensate the employees by providing them a day off on Friday or Monday. This is preferred by most employees who get a long weekend off. Having such understanding and concern for employee welfare goes a long way in building employee loyalty toward the organization.
Employee’s Religious Needs
Many employers show reasonable accommodation for the religious needs of a diverse workforce when it comes to salaried personnel and holiday pay. The best way to do it is to offer a “floating holiday" to the employees apart from the official holidays, for which the employees get paid. This floating holiday can be used by different employees as per their religious needs on days that may not be a part of the established holiday schedule of the company.