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How do I pay employees who worked on a paid holiday? We are paying all employees whether they worked or not.

I am assuming that you do not have an employee manual (published policies) and are not unionized. From the Department of Labor website, “The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays (federal or otherwise). These benefits are generally a matter of agreement between an employer and an employee (or the employee's representative).”

Most companies do have a policy for non-exempt (hourly) employees and many do for exempt (salaried) employees as well, such as: “Employees required to work on an authorized Company Holiday are paid 8 hours of holiday pay in addition to the hours that they work on the holiday at their regular hourly pay.”

Another tactic that you could use would be to offer employees compensatory time off (i.e., they can take another day as a floating/paid holiday if they were required to work on a company-paid holiday).

Whatever you do, be consistent in the administration of practices that you establish. Otherwise, you will open yourself to claims of discrimination. Hope this is helpful.