As California continues to expand its list of “recognized” holidays with the addition of Genocide Remembrance Day, Juneteenth, and Native American Day, many employers are left asking what rules they must follow regarding holiday pay? There are many misconceptions about employer obligations regarding holidays and holiday pay. But, an employer’s obligations will depend upon whether they are a private or public employer, have agreed to provide paid holidays, or are a public works contractor.
Holiday Pay FAQ
Here are a few reminders for California employers about holiday pay.
Must private sector employers provide time off for holidays?
No. California employers are not legally obligated to recognize holidays, including religious holidays. There is no state or federal law that requires employers to close for a holiday or provide paid time off during a holiday or for religious observances.
An employer may be contractually obligated to recognize holidays and provide holiday pay if it has a policy, practice, or is subject to a collective bargaining agreement, wherein it promises to do so. Also, California’s Fair Employment and Housing Act and Title VII of the Civil Rights Act of 1964 may also require an employer to reasonably accommodate religious observances and holidays through the provision of unpaid time off or rescheduling of duties.
If an employer observes a holiday – must it pay its hourly employees?
No. An employer who observes a holiday is not legally obligated to pay its hourly employees. In other words, an employer who closes its business operations in observance of a holiday is not legally obligated to pay its hourly employees for said holiday closure.
An employer may be contractually obligated to pay for holiday closures if has promised to do so through an employment agreement, job offer, employee handbook policy, practice, or collective bargaining agreement. Although no law requires paid time off for holidays, an employer will be held to its promises of paid time off for holidays.
Separate consideration must be given for exempt (salaried) employees. Exempt employees are entitled to their full salary if they work any part of the week. Deductions from salary for holiday closures are not permitted and would violate the California Labor Code and Fair Labor Standards Act. There are very limited circumstances in which reductions of a salaried exempt employee’s pay are permissible and employers must consult counsel before making any deductions in pay for a workweek and improper deductions can cause the loss of the employee’s exempt status resulting in significant liability.
Must hourly employees who work on an employer-recognized holiday receive a premium pay rate?
No. An employer is not legally obligated to pay a premium rate to hourly employees who work on a holiday. Hours worked on a Saturday, Sunday, or holiday are treated the same as any other day and premiums are only required if the employee works more than eight hours in a day or 40 hours in a workweek.
However, an employer may be contractually obligated to pay a holiday premium rate if it has an employment agreement, job offer, employee handbook, policy, practice, or is subject to a collective bargaining agreement, wherein it promises to do so.
Must employees earning Prevailing Wage receive paid holidays?
All workers employed on public works projects must be paid the prevailing wage determined by the Director of the Department of Industrial Relations. Prevailing wage rates depend upon the classification of craft or trade and those employed on public works projects are entitled to premium pay for hours worked on particular holidays as set forth in the applicable determination. For most trades, the specific holidays and premium requirements are based on collective bargaining agreements and incorporated into the Director’s determination. For prevailing wage determinations based upon other than a collective bargaining agreement, such as based on a survey, the holidays are determined by the Legislature and incorporated into the Director’s prevailing wage determination for the craft or trade.
Generally Recognized State Holidays as of 2023
The California legislature has designated a number of holidays, which may result in the closure of public offices and may be incorporated into prevailing wage determinations as noted above. Effective January 1, 2023, Genocide Remembrance Day, Juneteenth, and Native American Day were added to the following list of official state holidays:
- Every Sunday
- January 1
- The third Monday in January, known as “Dr. Martin Luther King, Jr. Day”
- The date corresponding with the second new moon following the winter solstice or the third new moon following the winter solstice should an intercalary month intervene, known as “Lunar New Year”
- February 12, known as “Lincoln Day”
- The third Monday in February, known as “Presidents Day”
- March 31, known as “Cesar Chavez Day”
- April 24, known as “Genocide Remembrance Day”
- The last Monday in May, known as “Memorial Day”
- June 19, known as “Juneteenth”
- July 4
- The first Monday in September, known as “Labor Day”
- September 9, known as “Admission Day”
- The fourth Friday in September, known as “Native American Day”
- The second Monday in October, known as “Columbus Day”
- November 11, known as “Veterans Day”
- December 25
- Good Friday from 12 noon until 3 p.m.
- Every day appointed by the President or Governor for a public fast, thanksgiving, or holiday. Except for the Thursday in November appointed as Thanksgiving Day, this paragraph and paragraphs (3), (4), and (7) shall not apply to a city, county, or district unless made applicable by charter, or by ordinance or resolution of the governing body thereof.
What Should California Employers Do?
Although not required to do so, many employers elect to provide paid holidays as a way to attract talent and maintain employee morale. If you elect to provide paid holidays, adopt clear handbook policies regarding the days on which the offices will be closed, which holidays will be paid, and how premium pay is to be determined for those who work on a holiday. If you plan to keep an office open for a holiday, your policies should address how to request time off, such as the use of accrued vacation or PTO, and your retention of discretion to deny a request for time off based upon business needs. Private California employers have flexibility in structuring holiday policies. It is important that you work with your employment counsel to craft a plan that works for your business and provides clarity to your management and employees.
