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Holiday Hotline: Holiday Pay and Policies

by Jennifer Shaw and Melissa Whitehead | | December 11, 2023

For many, December is a joyful time of year, full of parties, dinners, and decorations. Yet those same festivities make December a busy time of year for us at Shaw Law Group, as we field all kinds of holiday-season-related questions from our clients. This year, we’ll share some of those questions with our faithful blog readers in a December series we’re calling the “Holiday Hotline”! Today, we’ll tackle a few questions about holiday pay and policies…

Dear SLG: Can our policy deny holiday pay for employees who do not work the day before or after an otherwise designated paid holiday?

Yes, but only if you have a written policy including that requirement, and with exceptions for preapproved or legally-protected time off. For example, you should not deny holiday pay if an employee takes a protected sick leave absence the day before or after the holiday.

Dear SLG: We give our employees a floating holiday and let them choose whether to use it on December 24th or December 31st. Is there any risk with this practice? 

Yes.  Many employers provide “floating holidays” that may be taken at any time during the year at the employee’s option. Unlike regular paid holidays, which are not required by law, the California Labor Commissioner takes the position that employees must be paid for accrued, unused floating holidays at the time of separation, just like vacation and PTO. However, the Commissioner exempts floating holidays that must be taken in “close proximity” to another date, like in the policy you describe. The key is to limit the use of any floating holidays to certain days or dates, such as the employee’s birthday.  Otherwise, you are essentially just giving employees additional vacation/PTO.

Dear SLG: We provide paid holidays to our employees, but occasionally the nature of our work requires an employee to work on one of those holidays. Do we have to pay that employee their regular pay plus the holiday pay? 

Maybe. Courts generally interpret policies providing paid holidays as a contractual promise to give a paid day off, so if you do not deliver on that promise, you must make it up to the employee. Common ways of doing so are paying for the hours worked at a premium rate, paying for the hours worked in addition to giving holiday pay, or paying for hours worked and providing another day off.


Want to learn more tips on how to approach the holiday season in your workplace? Join us next week for the third installation of “Holiday Hotline”!

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