Thursday, July 3, 2014

Hamburgers, Hot Dogs and Holiday Pay

The Fourth of July weekend is upon us! I am sure I am not alone in trying to stay focused on work today and not on all of the fun, food, and fireworks that are in the very near future.

Does this mean an extra day off for the week? Sure does! Does this also mean that if I were employed with ABC Company that I may not be paid for my Friday off during my fun-filled holiday weekend since the office was closed for the holiday? Unfortunately it does.

I think we can all be realistic in saying that when the workplace closes for an observed holiday, regardless of the time off from work being paid or unpaid, there are very few employees that will complain about having an extra day off from work, especially if it creates a three day-weekend.

However, as personal budgets have tightened over the years and today’s employees try to make every dollar count, one day off unpaid from work doesn’t exactly make employees want to high-five their boss when returning to work after a holiday closing. Employees count on the fact that if the business is closed for an observed holiday they in turn should be paid by their employer to cover their time away from work. Holiday pay has become a pretty commonplace policy for businesses of all sizes. In fact, according to a survey conducted by the Society of Human Resources Management in 2009, 97 percent of employers paid holidays to their full-time employees.

Does this mean an employer has to offer holiday pay? The the Fair Labor Standards Act says no. As a business you are not required, at least by federal law, to offer holiday pay.

Of course if your business is a 24/7 operation and someone has to be on staff at all times this doesn’t mean because it may be an observed holiday by the company and others are off – you do not have to pay the employees working on the observed holiday. Regardless of observed holiday status or not, if an employee is working on an “observed” company holiday they have to be paid in accordance to the Fair Labor Standards Act. In fact it’s typical to see businesses actually offer incentive holiday pay for those willing to work on observed holidays (think double pay or time-and-a-half for these people sacrificing their hot dogs, hamburgers, and fireworks so their co-workers can enjoy their holiday.)

I were to give you any great Independence Day advice it would be that offering holiday pay will help dissipate any workplace fireworks that may be set off by trying to save a few dollars wages. Trust me when I say if you don’t pay your employees holiday pay for observed holidays there are likely to be discussions among your employees about how financially frugal your business is.

Since federal law does not dictate what an employer does or doesn’t have to pay in regards to holiday pay, businesses have the opportunity and flexibility to create a holiday pay policy that works for them and their employees. Employers are able to determine eligibility requirements (probationary status, full-time/part-time), what holidays are observed, what happens if a holiday falls on a weekend, exclusions for holiday pay (bonus, commissions, etc), shifts required to be worked before/after the holiday, and other specifics. Of course all of these have to be uniformly implemented and maintained by management, but I can promise you it’s not that hard.

Also, another great unknown benefit about holiday pay for employers (not so much for employees looking for some extra holiday cash) is any holiday pay paid to employees cannot be counted towards overtime calculations.

Holiday pay is an inexpensive way to show employees a business cares by offering employees time off with pay to enjoy the holiday celebrating with family and friends. Businesses that fail to see the value in offering this benefit to employees more than likely will see a parade of employees walking out the door – signing their individual "Declaration of Independence" letters on their way out.

Monica Bitrick is the CEO of Bitrick Consulting Group, a human resources company in Idaho Falls.