Believe it or not, the holiday season is almost upon us, along with an increase in employee requests for time off. To ensure a smooth start to the new year, now is the time for employers to brush up on their knowledge of holiday pay and vacation benefit requirements.

Pay requirements under state and federal laws

Private employers may be surprised to learn that state and federal laws generally do not require paid or unpaid holiday leave for nonexempt employees. Nor are private employers generally required to compensate those employees who work on holidays at a premium rate. Some exceptions may apply for contractors and subcontractors working on federally funded projects.

However, when reviewing holiday policies, employers should remember that they must honor any established policy or agreement relating to the payment of benefits. For example, if an employer has a policy of paid leave for certain holidays, then the policy governs, and the employer must provide paid leave for those holidays.

Considerations for unionized workplaces

Although private employers are not required to provide holiday pay and vacation benefits in ordinary circumstances, they may be obligated to consider these benefits under the National Labor Relations Act.

Employers with unionized workplaces are subject to mandatory subjects of collective bargaining, including those that directly affect wages, hours, and other terms and conditions of employment. Accordingly, holiday pay and vacation benefits will be points of discussion when forming a collective bargaining agreement. See NLRB v. Century Cement Mfg. Co. (1953). If a collective bargaining agreement includes provisions regarding holiday pay and vacation benefits, employers are required to abide by that agreement, even if providing such benefits is not required by law.

General employment considerations

Regardless of an employer’s holiday pay and vacation benefits policies, there are several employment issues to consider during the holiday season.

First, employers that anticipate the holiday season will be a particularly busy time should monitor nonexempt employees’ hours to ensure they are compensated at the proper rate. Although premium pay is not required for employees working on holidays, a nonexempt employee whose work week exceeds 40 hours must still be paid overtime for each hour worked above that threshold. Employers should note that under the Fair Labor Standards Act, only hours “actually worked” count toward the 40-hour threshold. If an employer has a policy that provides paid leave for a holiday, or if an employee uses paid time off (PTO) on a holiday, the policy should highlight that those hours do not count for purposes of calculating overtime for that work week.

Second, employers should consider implementing and reminding employees of absence policies and procedures. During the holiday season employers may see an increase in the number of employees requesting an absence. Reminding employees of their responsibilities regarding absences and the employer’s expectations can be a useful tool to combat such actions.

Third, employers may benefit from implementing or reminding employees of procedures for submitting holiday vacation requests. This may include highlighting any established timelines for submitting holiday vacation requests, who requests should be submitted to, and whether employees who receive PTO benefits are required to use PTO for their absences.

Federal antidiscrimination considerations

Title VII of the Civil Rights Act of 1964, which applies to employers with 15 or more employees, requires that employers make reasonable accommodations for employees’ religious observances. Oregon law has the same requirement, but it applies to any employer with at least one employee. Employers should ensure they have adequate procedures in place for employees to request religious accommodations to participate in religious celebrations during the holidays. In this context, an accommodation could look like creating an alternative work schedule for the employee or permitting the employee to use PTO. Employers should keep in mind that, generally, they may deny such accommodations only when an undue hardship to the employer would result.

When employers do not provide time off for holidays celebrated by multiple employees, it is important to maintain a neutral system for determining which employees are accommodated to ensure nondiscriminatory practices. Employers might consider adopting a policy that outlines this neutral system to ensure that employees are apprised of the process for determining whose requests will be granted.

Takeaways

Unless employers currently have a policy or practice of providing paid holiday and vacation time to employees, private employers are generally not required to provide employees with holiday and vacation benefits. When choosing not to provide such benefits, employers should make sure to abide by neutral policies for providing religious accommodations to those who wish to not work on holidays, and employers should ensure that employees are properly compensated for their time. Employers that choose to implement holiday pay and vacation benefits should understand that their policies govern the relationship with their employees and should make evident any changes in such policies.

Ashley Korkeakoski-Sears is an attorney with Barran Liebman. She advises and represents employers on a wide range of workplace issues.

Lex Shvartsmann is a law clerk with Barran Liebman. She partners with attorneys in client trainings, legal research, and drafts of employment policies and handbooks.