Paid Holidays: What And When Are They?

By Sky Ariella - Jul. 7, 2021
Articles In Guide

Find a Job You Really Want In

Employers compensate their teams in more ways than just a salary for their work and effort. It’s standard to provide a benefits package that includes some form of paid time off.

Incorporating paid time off can improve employee satisfaction and motivation. There are a few ways that an organization can go about supplying their employees with time off.

Paid time off could be through:

Many companies offer a comprehensive package that includes a variety of these options, and sometimes even incorporate all of them into a job offer.

The purpose of supplying candidates with paid holidays is to recognize the need for their personal time, while still providing them with the wage they need to survive.

What Are Employer-Paid Holidays?

Employer-paid holidays are specified days off from work while still receiving compensation.

Paid holiday details are generally established during the onboarding process. Typically, they refer to federally observed holidays. They differ from sick days and vacation time in that their purpose is to observe a specific holiday.

While many corporations incorporate paid holidays into their benefits package to increase work satisfaction, it is not required by law. The Fair Labor Standards Act (FLSA) only covers federal minimum wage and requirements for exempt vs. non-exempt employees with regard to overtime pay. While paid holidays often fall on national or state holidays, that does not mean private employers are mandated to offer employees days off for them.

How Do Employer-Paid Holidays Work?

When a company is providing employer-paid holidays for their team, it means that they’re allowing the employee the day off, or a series of days off, for particular holidays and will still pay them for that time. The exact way a company handles holidays and the resources they provide their employees can differ.

Usually, the holidays that are covered by employers are the ones that are recognized by the federal government.

Here is a list of all the federally recognized holidays:

  • New Year’s Day

  • Martin Luther King Jr. Day

  • Washington’s Birthday (President’s Day)

  • Memorial Day

  • Independence Day

  • Labor Day

  • Columbus Day

  • Veteran’s Day

  • Thanksgiving Day

  • Christmas Day

An employer can also extend their paid holidays to include other days that aren’t federally recognized, such as:

  • Christmas Eve

  • New Year’s Eve

  • Easter

  • Election Day

Employers also have the option of offering floating holidays. This means that instead of dictating particular holidays that can be paid, they provide a set number of days that the employee can use for holidays they recognize at their discretion.

Floating holidays can be beneficial because it allows an employee to take off for holidays that are important to them, but may not be commonly celebrated in the United States. They act as a more inclusive way of supporting employee needs.

Employer-paid holidays and salary will often be negotiated with an applicant during the hiring stage. It can be a good idea to ask applicants during the interview what their requirements are in these areas. It’s useful to know what an employee’s standards are before you make them an offer, especially when you’re vying for a very impressive candidate.

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

  • The average amount of paid holidays for all full-time employees in the private industry is 8 per year.

  • The most common holidays, across all industries, are Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and New Year’s Day.

  • Only 37% of leisure and hospitality employees have access to paid holidays, while 97% of workers in manufacturing and information have access to them.

  • People who work in leisure and hospitality receive the fewest paid holidays on average, at just 6 a year (25% lower than the average)

As stated earlier, the FLSA makes no mention of paid holidays, meaning that it’s entirely at a private employer’s discretion what days off to offer employees. That also means that there’s no difference between salaried, exempt employees and non-exempt employees who work for an hourly rate when it comes to paid holidays.

If an employer wants to offer hourly workers paid time off for a holiday or give them time-and-a-half to for the workday, that’s their prerogative. But they’re not required by law to offer extra compensation for working on a federally recognized holiday.

The only difference between non-exempt employees and exempt ones has to do with overtime pay and minimum wage, not holidays, paid or otherwise. All this being said, Americans have certain expectations surrounding certain holidays, so savvy employers know to offer time off or at least incentivize employees to work on days when most folks are off.

Benefits of Employer-Paid Holidays

When you’re looking for employees to bring talent and experience to your team, you need a reason to attract them to your offer. There’s a lot of competition out there for skilled employees, especially when recruiting for leadership positions. Providing a strong collection of employer-paid holidays in your benefits package can secure you the best candidates for a job.

You want your team to love working for you. One way to do that is to offer them the best benefits available. Offering plenty of paid holidays can improve the productivity of your current staff because it’s a strong motivational tool.

People want to do their best work for an employer who supports them. Giving your team the time that they need to observe holidays and still maintain compensation is a great way to demonstrate this support.

So, what paid holidays should you offer at your organization?

This is dependent on your work environment and the employee you’re dealing with. Offering at least some form of paid time off is probably a good idea across the board, but you’ll also need to consider the budget of your organization. Without providing for at the bare minimum, 5 federally recognized holidays a year you risk employee happiness and productivity (not to mention recruitment troubles).

Perhaps at this stage of your company’s development, you only have the resources to provide for 6 federally recognized holidays a year. That’s okay, and your employees will appreciate it more than offering them nothing.

Your paid time off benefits can also differ for varying employees. Senior-level managers should probably be designated with the most comprehensive holiday package. Entry-level associates can start with some employer-paid holidays and gradually acquire more benefits as they move through the company.

Some positions may not require, or expect, paid time off. These could include:

  • Contract employees

  • Consultants

  • Part-time employees (although, you could extend some paid holidays to them if you choose)

Alternatives to Employer-Paid Holidays

Coordinating a benefits package is really up to the employer. There are a few alternatives you could use to employer-paid holidays that still attract impressive employees. You can mix and match these options to best fit the needs and capabilities of your organization.

Some alternatives may work better for some companies than others. Below are some examples of what could be included or implemented instead of or in addition to employer-paid holiday packages for federally recognized holidays.

  1. Double pay for working on federally observed holidays. Perhaps your company is in a field that can’t simply give everyone off for Christmas, or can’t afford to give everyone paid time off.

    Offering double pay to employers who volunteer to work on these holidays instead of taking the time off without pay is an excellent way to handle this situation. It provides an employee with an incentive for working, fills hours that would need to be taken regardless, and saves an organization money because they’re only paying the people who are on the clock for those days.

  2. Personal days. Offering a set number of personal days in your employee’s benefits package can definitely be as valuable as employer-paid holidays.

    Personal days can be helpful for the employee because it gives them the option of choice for when they’d like to use their paid time off. After all, life can be unpredictable and it can be useful for employees to know they have paid time off that they can apply when they need it most.

  3. Two floating holidays in addition to federally recognized holidays. Including two floating holidays in addition to federally recognized holidays can make your benefits package very competitive. Floating holidays are paid time off for religious observance that isn’t correlated to a specific holiday and can be used whenever the employee needs them.

    The tough thing about only providing time off for federally recognized holidays is that it’s very exclusive. Many employees in the United States don’t need time off for Easter but do need it for another holiday. Offering two additional floating holidays can accommodate for other belief systems and religious observances.

  4. Work from home days. Everyone’s life is different, and sometimes, employees need the day to finish their work from home. For instance, a team member whose child gets sick and has nobody to watch them for the day. Implementing work from home days into your benefits package can accommodate this need.

    During work from home days, employees are still expected to get their tasks done and contribute virtually, but they aren’t required to come into the office. Employees appreciate this consideration for their circumstances. This can be a useful tool for companies that want to offer their team flexibility, but don’t have the resources to lose productivity.

  5. Consider busy seasons. When you’re crafting the employer-paid time off inclusions for your team, you should also consider the time of year. Some months and seasons are busier for particular industries than others.

    For example, in the summer an ice cream shop is at its highest peak of sales and vice versa for a snowboarding company in the winter. For the ice cream shop, it would be beneficial to implement more working flexibility during the winter.

    On the other hand, a snowboarding company should be getting less business in the summer and use this time to offer employees more time off.

    In addition to considering the busiest times of the year for your business, you must also take into account when it may be important to provide time off regardless of how busy you are. For example, even though the snowboarding company will see the busiest season during the winter, they should still consider giving paid time off for major holidays such as New Years Day and Christmas Day.

  6. Include extra days around certain holidays. For some occasions, such as Thanksgiving, the holiday lands on a weekday. Holidays like Thanksgiving also tend to be family-oriented and may require some travel.

    Giving an employee off for the actual day, but then requiring them to come in the next day can be difficult for them to accommodate. Consider providing your team with a long weekend for holidays like this, instead of just applying time off to the day itself.

  7. Allow employees to save up their vacation days. Many companies offer their employees a set number of paid vacation days, usually in the realm of two weeks per year.

    This time doesn’t always roll over into the next year, though. Giving your employees the option to collect their vacation days is a great way to allow your team members to control their paid days off, and build up more time if needed.

Final Thoughts

Providing your employees with a comprehensive package of paid holidays and time off is an investment in your company’s future. An organization relies on the productivity and work ethic of its employees. If the people who keep your business running feel undervalued, it will show in the results.

Part of an employer’s job is to sustain your employees, and that comes in more ways than paying them a reasonable salary for the work they do. Try to offer the most you possibly can in terms of employer-paid holidays. Take into account the variety of religious beliefs and life situations your employees could have and accommodate for them.

How useful was this post?

Click on a star to rate it!

Average rating / 5. Vote count:

No votes so far! Be the first to rate this post.

Articles In Guide
Never miss an opportunity that’s right for you.


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.

Related posts