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February 20, 2023, was Presidents’ Day, one of several federal holidays occurring throughout the year in the United States. Private-sector employers are not required by federal law to give employees any federal holidays off. Nevertheless, many private companies provide at least some federal holidays off for their employees. Are those private-sector employers that choose to provide their employees with holidays off required to pay the employees for that time? It depends.
Under the Fair Labor Standards Act (FLSA), employers are required to pay hourly nonexempt employees only for hours actually worked. A private-sector company therefore is not required to pay hourly nonexempt employees for any hours not worked due to an employer-sponsored holiday. Private companies can, of course, still choose to provide their nonexempt employees with holiday pay for hours not worked.
In contrast, salaried exempt employees under the FLSA almost always must be paid their full weekly salaries when they work any portion of a workweek, with certain limited exceptions. So, even if a private-sector business is closed for a federally recognized holiday during a workweek, the company is still required to pay exempt employees their full weekly salaries, without any deductions.
Of course, if an exempt or a nonexempt employee performs remote work on a day that his or her private-sector employer is closed for a holiday, the FLSA requires that all such work be compensated accordingly. There is not an accompanying requirement, however, that private-sector employers provide any kind of special or premium holiday pay (such as time-and-a-half or double time) to hourly nonexempt employees who perform work on employer-sanctioned holidays. Rather, they may still be paid at their regular rates of pay (unless they actually work overtime hours).
Lastly, because state laws may differ from the FLSA’s requirements, employers may want to consult the laws of any state where they have business operations to identify any differing requirements surrounding holiday pay.
