Understanding Legal Compliance for Paid Holidays

Quick Hits

• There are eleven federal holidays in 2026.
• Private employers are not legally obligated to provide paid holidays.
• Work performed by hourly, nonexempt employees on a holiday is compensable.

Although federal law does not require private businesses to provide paid holidays, many companies voluntarily recognize certain federal holidays as paid holidays in order to boost recruiting, retention, and morale. Some companies choose to include paid holidays within their combined paid time off (PTO) policy, so that employees can pick which holidays they prefer to observe.

In 2026, there are eleven federal holidays: New Year’s Day (January 1), Martin Luther King, Jr., Day (January 19), Inauguration Day (January 20), President’s Day (February 16), Memorial Day (May 25), Juneteenth (June 19), Independence Day (July 4), Labor Day (September 7), Columbus Day/Indigenous Peoples’ Day (October 12), Veterans Day (November 11), Thanksgiving Day (November 26), and Christmas Day (December 25).

In addition, some states recognize certain holidays beyond the federally recognized list, although they do not require private employers to provide paid holidays. For example, Louisiana recognized Mardi Gras and Good Friday on February 17 and April 3 this year. Utah will celebrate Pioneer Day on July 24, 2026. Hawaii will celebrate King Kamehameha Day on June 11, 2026, and Hawaii Admission Day on August 21, 2026. In Rhode Island, employees who are required to work on Sundays and certain holidays must be paid 1.5 times the regular rate of pay. Illinois, Maine, and Nevada are also worth noting in that they require paid leave for any reason, so an employee who takes leave on a holiday may be entitled to pay.

Among private-sector workers and state and local government workers, the average number of paid holidays per year is eight, according to the U.S. Bureau of Labor Statistics (BLS).

Federal and state agencies generally are required to be closed on official federal or state holidays. Essential personnel, such as law enforcement officers, air traffic controllers, and medical professionals at Veterans Affairs (VA) hospitals, may be required to work on holidays. They are entitled to holiday premium pay, which is additional pay equal to the employee’s regular pay rate.

Under the Fair Labor Standards Act (FLSA), private companies are required to pay hourly, nonexempt workers for any hours worked on a holiday. Overtime pay is required if working on a holiday puts the nonexempt worker over forty hours for the week. The FLSA does not require that employers pay premium “holiday pay” on worked holidays.

Salaried, exempt employees must be paid their full weekly salaries when they work any portion of a week, with certain limited exceptions. Thus, even if a business is closed for a weekday holiday, the company still must pay exempt employees their full weekly salaries.

Union contracts may stipulate a certain number of annual paid holidays per year or a specific list of holidays that the employer must observe annually. Union contracts also may require holiday premium pay in certain situations.

Next Steps

Private employers may wish to evaluate their paid holidays and PTO policies to determine whether they are achieving the expected business goals, such as attracting and retaining talent. They may wish to track patterns in employee absences by using automated HR software or card swipes for building entry. This data can help employers decide which holidays to designate as paid company holidays.

Employers also may wish to coordinate with their third-party payroll vendors to ensure that hours worked on holidays are calculated correctly and any mandated holiday premium pay is allocated properly.

Ogletree Deakins’ Leaves of Absence/Reasonable Accommodation Practice Group and Wage and Hour Practice Group will continue to monitor developments and will post updates on the Employee Engagement, Leaves of Absence, and Wage and Hour blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on federal and state laws related to holidays and wage and hour issues, including overtime rules. Premium-level subscribers have access to comprehensive law summaries; Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

Lucas J. Asper is a shareholder in Ogletree Deakins’ Greenville office.

Charles L. Thompson, IV, is a shareholder in Ogletree Deakins’ San Francisco office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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