Paid Holidays: What And When Are They?

In today’s competitive job market, employers provide compensation beyond just a salary. A comprehensive benefits package typically includes various forms of paid time off, which is essential for employee well-being.

Offering paid time off not only enhances employee satisfaction but also boosts motivation and productivity. Organizations can approach paid time off in several ways, with many companies presenting a diverse package that may even be included in a job offer.

This article explores what paid holidays are, when they are typically observed, and alternatives to employer-paid holidays.

Key Takeaways:

• The primary goal of offering paid holidays is to acknowledge the need for personal time while ensuring employees receive their necessary wages.

• Paid time off can include:

  • Sick days

  • Vacation days

  • Personal days

  • Federally recognized holidays

  • Floating holidays

• If your employer doesn’t offer paid holidays, they might provide alternatives such as double pay on federal holidays, additional personal days, or the option to roll over vacation days.

What Are Employer-Paid Holidays?

Employer-paid holidays refer to designated days off from work where employees continue to receive their regular pay.

Details about paid holidays are typically outlined during the onboarding process, primarily relating to federally observed holidays. Unlike sick days or vacation time, paid holidays are specifically set to recognize certain occasions.

While many companies choose to include paid holidays in their benefits package to enhance employee satisfaction, it is not a legal requirement. The Fair Labor Standards Act (FLSA) addresses minimum wage and employee classification concerning overtime but does not mandate paid holidays.

How Do Employer-Paid Holidays Work?

When a company offers employer-paid holidays, it grants employees time off for specific holidays while continuing their pay. The management of holidays and benefits may vary by organization.

1. Federal Holidays. Commonly, employers provide paid time off for holidays recognized by the federal government.

   Here is a list of federally recognized holidays:

   • New Year’s Day (January 1)

   • Martin Luther King Jr. Day (Third Monday in January)

   • President’s Day (Third Monday in February)

   • Memorial Day (Last Monday in May)

   • Independence Day (July 4)

   • Labor Day (First Monday in September)

   • Columbus Day (also observed as Indigenous Peoples Day) (Second Monday in October)

   • Veteran’s Day (November 11)

   • Thanksgiving Day (Fourth Thursday in November)

   • Christmas Day (December 25)

   • Juneteenth National Independence Day (June 19)

   Employers may also choose to include additional holidays that are not federally recognized, such as:

   • Christmas Eve (December 24)

   • New Year’s Eve (December 31)

   • Easter (Traditionally observed on the first Sunday after the first full moon following the spring equinox)

   • Election Day (First Tuesday after the first Monday in November)

2. Floating holidays. Some companies offer floating holidays, allowing employees to choose days off based on their personal or cultural significance.

   This flexibility can enhance inclusivity, enabling employees to observe holidays that may not be widely celebrated.

Employer-paid holidays and salary negotiations often occur during the hiring process. It can be beneficial to discuss candidates’ expectations regarding holidays to ensure alignment, especially when competing for top talent.

Paid Holidays: Salaried vs. Hourly Employees

The FLSA does not address paid holidays, leaving it up to employers to decide which days off to provide. Consequently, there is no distinction between salaried, exempt employees, and non-exempt employees regarding paid holidays.

Employers may choose to offer hourly workers paid time off for holidays or provide overtime pay for holiday work, but they are not legally obligated to do so.

The key difference between non-exempt and exempt employees lies in overtime pay and minimum wage, not holiday pay. However, understanding employees’ expectations around holidays is crucial, as savvy employers recognize the value of providing time off or incentives for working on traditional holidays.

Benefits of Employer-Paid Holidays

• Attracting top talent. In a competitive job market, offering an attractive package of employer-paid holidays can help you secure the best candidates.

• Enhancing employee satisfaction. Providing ample paid holidays can lead to higher productivity and morale among employees, demonstrating that you care about their well-being and personal time.

Alternatives to Employer-Paid Holidays

When designing a benefits package, employers can explore various alternatives to traditional paid holidays that may better suit their organizational needs.

Some alternatives may include:

1. Double pay for working on holidays. For businesses that require staff during holidays, offering double pay can incentivize employees to work while managing operational needs.

2. Personal days. Allowing employees a set number of personal days provides flexibility in using their paid time off when needed.

3. Floating holidays. Providing additional floating holidays can enhance inclusivity and accommodate diverse religious or cultural observances.

4. Work-from-home days. Offering remote work options can help employees balance their personal and work responsibilities effectively.

5. Seasonal considerations. Adjusting holiday policies based on industry demand can optimize employee time off while meeting business needs.

6. Extended holiday breaks. Providing extra days off around holidays like Thanksgiving can support family travel and gatherings, enhancing employee satisfaction.

7. Vacation day rollover. Allowing employees to save unused vacation days can give them more control over their time off.

How Some Employers Determine Paid Time Off

The approach to paid time off varies by organization and employee roles. While offering at least some paid time off is advisable, employers must consider their budget. Providing a minimum of five federally recognized holidays can significantly impact employee satisfaction and retention.

Paid time off benefits can differ by position, with senior-level managers typically receiving more extensive holiday packages than entry-level employees.

Some roles may not require or expect paid time off, including:

• Contract employees

• Consultants

• Part-time employees (though some companies may choose to extend certain benefits to them)

Paid Holiday Statistics

• According to the Bureau of Labor Statistics, 77% of private industry workers have access to at least some paid holidays.

• The average number of paid holidays for full-time employees in the private sector is 8 per year.

• Common holidays across industries include Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and New Year’s Day.

• Access to paid holidays varies significantly by industry, with only 37% of leisure and hospitality employees receiving them, compared to 97% in manufacturing and information sectors.

• Employees in leisure and hospitality receive the fewest paid holidays, averaging just 6 days per year, which is 25% lower than the overall average.

Final Thoughts

Investing in a robust package of paid holidays is a strategic move for any organization. Valuing employee time off is crucial for maintaining productivity and morale. If employees feel undervalued, it can negatively impact their performance and the overall success of the business.

As an employer, it is essential to support your employees not just with fair compensation, but also by offering comprehensive paid holidays. Consider the diverse needs of your workforce and strive to create a benefits package that accommodates various beliefs and life situations.

Author

Sky Ariella

Sky Ariella is a professional freelance writer, originally from New York. She has been featured on websites and online magazines covering topics in career, travel, and lifestyle. She received her BA in psychology from Hunter College.