With Independence Day fast approaching you’re probably focused on barbecues, fireworks, and the red, white, and blue. Holidays don’t automatically mean a day off for medical practices, some of which might be open normal or reduced hours in order to take care of patients. Rules pertaining to holiday pay can be tricky, so we’ll help you sort through the legalese in order to have a better understanding of holiday, overtime, and vacation pay.
First off, keep in mind that Federal law doesn’t stipulate you must pay your employees extra money for working on holidays. Labor laws make no distinction between holidays and regular working days, so you need only pay employees their normal salary. Because the Fair Labor Standards Act (FLSA) only requires you pay employees for time worked, if they take a day off that happens to land on a Federal holiday – say, Christmas or the 4th of July – you are not required to pay them.
Having said this, many employers do offer extra pay as an incentive for working on holidays. These fall under the umbrella of employee benefits and, as such, make up part of an employee contract. If your employee contract includes paid holidays, then you must pay them for those days. Typical paid holidays in the United States include:
- New Year’s Day
- Memorial Day
- Independence Day
- Labor Day
These vary by organization, of course. Some employers offer additional paid holidays such as President’s Day, Martin Luther King Jr.’s Birthday, the Friday after Thanksgiving, Christmas Eve, and New Year’s Eve. While paid holidays are totally at the individual employer’s discretion, they go a long way toward improving employee satisfaction and morale.
While federal law defines holidays as normal working days and does not require overtime pay, remember that most state and federal laws do require employers to pay overtime to nonexempt employees; because overtime pay is calculated weekly, if your employee works extra hours during a week in which a holiday lands, you’ll need to pay them for that time. The standard overtime pay rate – time and a half – is calculated at 1.5 times the employee’s normal pay. Some employers offer double time for working on holidays; this is simply calculated at 2 times the employee’s regular pay. California has specific double time rules; if your practice is located in that state, consult your labor board for details. They (and a few other states) also have “daily overtime standards” stipulating that all hours worked beyond 8 on a given day must be paid at time and a half.
Finally, if your employee takes a vacation day on a holiday, you are not legally obligated to pay them under Federal law. Nor, for that matter, is there any law stating you must pay them for vacation days at all. Again, most employers do offer benefits such as this in order to make the workplace more attractive, so be sure to spell out any specific details in the employee contract. Putting together an employee handbook and making sure all employees, new and current, have an up-to-date copy can help alleviate any surprised down the road.