Tis the Season: Holiday Pay and Holiday Leave


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According to the Society for Human Resource Management, about ninety-nine percent of all employers will give their employees the gift of holiday leave. Of this ninety-nine percent of employers, those individuals employed by the state will not only enjoy a day off from work, but also, will be compensated for the time spent away from the office or trimming the tree.  Private employers, however, are not required by state or federal law to compensate their employees for holiday leave. The Tennessee Department of Labor and Workforce Development expressly provides that private employers are not required to offer fringe benefits, such as holiday pay, to employees.  Similarly, the Fair Labor Standards Act (“FLSA”), which regulates employee compensation practices on a national level, does not require non-exempt employees to receive paid holiday leave.  Thus, whether to give the gift of paid holiday leave is left to the private employer’s discretion.  So long as the employee performs no work on the holiday, then, the employer is under no legal obligation to compensate the employee.

While private employers are not legally required to give paid holiday leave, many make this election to promote employee morale.  For those employers spreading such good tidings around the office, I recommend giving  this gift in compliance with anti-discrimination laws.  In other words, the employer should consistently give paid holiday leave, making no exception for an employee’s race, age, gender, or any other protected characteristic.  Savvy employers will ensure that the business’ Employee Handbook articulates whether and under what circumstances certain employees receive paid holiday leave.  Not only will memorializing this policy help ensure consistent application, but also, any distinctions made among employees, i.e., seniority, may be explained so as to show that the policy does not inappropriately rely on protected characteristics.

Employers that stay open on the holidays should also remember that a business is not required to pay overtime compensation to an employee for work completed on a holiday unless the employee’s work for the week has exceeded forty hours.  Employees who receive paid time off on a holiday may not count that time as hours worked for the week for purposes of calculating owed overtime compensation in accordance with the Fair Labor Standards Act.

Of course, not all employers can afford to close their business, even for a major holiday such as Christmas.  The operational needs of some businesses, such as hospitals, require that employees work on holidays.  However, employers should be cautious when it comes to refusing an employee’s request for time off.  There is no federal law requiring an employer to give employees off for religious holidays; however, employers may not treat employees differently based on their religious beliefs.  In some instances, an employer’s failure to permit an employee time-off may result in a claim of religious discrimination under Title VII of the Civil Rights Act of 1964, which prohibits employers from treating workers different based on protected characteristics, including religious beliefs, absent a legitimate business reasons. Employers are required to reasonably accommodation requests for religious observances unless doing so would cause an undue hardship to the business.

Regardless of an employer’s legal obligations, or lack thereof, the repercussions of failing to acknowledge holiday workers or holidays in general may have consequences outside of the legal arena.  Employers should want their employees to feel valued and to feel valued, employees must be treated well. In the United States, there are eleven office holidays for which employees may receive leave, as compared to the twenty-eight days offered in the United Kingdom. Employers would be well served to remember that generous holiday leave policies, where possible, are a great means of attracting and retaining employees.

If you have additional questions regarding holiday leave or holiday pay for you or your workers, contact me.