Holiday Time-Off Policy, Unpaid or Paid

Contrary to perhaps common perception, California’s private employers have no legal obligation to grant employee time off for holidays or to pay for that time.  Whether to provide workers that time away – paid or unpaid – to promote workforce goodwill and morale is a different question.

A business that opts in favor of such off time should best issue written policy with the rules.  For instance:

● List those holidays on which the company is closed. It’s management’s choice on which and how many. A sample:

New Year’s Day
Martin Luther King Day
Presidents’ Day
Memorial Day
Juneteenth National Independence Day (June 19)
Independence Day
Labor Day
Thanksgiving Day
Friday after Thanksgiving
Christmas Eve
Christmas Day

● State whether holidays are paid or unpaid. If paid, specify the rate, e.g., the number of hours for which an employee is normally scheduled to work on the day in question.  The policy can exclude commissions or bonuses in the calculation;

● Set out eligibility standards. For example, as long as the categories are clearly defined, introductory and temporary em­ployees need not be entitled to paid benefit;

● Require employees to work or be on an excused absence (i.e., for approved vacation time, paid sick leave or religious accommodation) on the workdays immediately preceding and following the holiday;

● Specify that an hourly employee who works on a paid holiday receives both holiday pay and compensation for the actual hours worked;

● Address the result when a holiday falls on a day the business is already closed.  For instance, if on a Saturday, the holiday could be observed on the prior Friday; if on a Sunday, observation could be on the following Monday;

● Provide that a holiday which occurs while an employee is on a scheduled vacation is not calculated as a vaca­tion day used; and

● Deal with the instances of workers unable or unwilling to take the paid time on the traditional holiday list. While an alternative “personal” or “floating” holiday is possible here, it’s best to link that day off to another specific event, e.g., the employee’s birthday, or to require the employee to take that time off within the same week as the holiday.  (To avoid underpayment penalties at the end of a worker’s employment, management should also ensure that employee actually takes that designated day off); and

● Anticipate the possible company need, on reasonable advance notice, to forego a holiday (as in an emergency) or eliminate it from the list, for example due to the nature of the business.

For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Happier and Healthier – Workplace Policy Handbook & Forms for 2022 (April 29, 2022)
• Play Pay – Employer’s Guide to California Holiday Policy (May 28, 2021)
• California Paid Vacation Can Be No Holiday – State Rules Ban “Use It or Lose It”(May 21, 2021)

Tim Bowles
June 30, 2022