Paid Holidays

What Are Paid Holidays?

Paid holidays are national, state, or religious holidays employers can choose to give as paid days off to their employees. There are no US federal laws requiring employers to give their employees paid holidays. The Fair Labor Standards Act (FLSA) only regulates minimum wage and overtime pay.

How Do Paid Holidays Affect Hourly vs. Salaried Employees?

As mentioned above, the FLSA doesn’t require businesses to offer paid holidays to their employees. Whether these employees are hourly or salaried doesn’t affect the determination from a legal standpoint. The employer is the one to decide if they’ll give their employees a day off on a particular holiday and if it’ll be a paid day off.

For hourly employees who are eligible for overtime pay, holidays aren’t considered any different from a normal workday and don’t automatically qualify for overtime pay. Again, it’s up to employers to determine if they’ll offer more pay during holidays. While salaried employees are paid on a yearly basis and aren’t subject to overtime pay, they also aren’t guaranteed paid holidays.

How Important Are Paid Holidays?

While there isn’t specific data on paid holidays, paid time off and vacation time are consistently listed among the most important benefits by both employees and employers. Many employees expect paid holidays and time off as part of their employment benefits.

Some research suggests that employees may even choose these benefits over better pay. BambooHR research found that 30% of workers left a job solely due to the benefits package. Better health benefits, more flexible work hours, and vacation time are high priorities for workers.

And business owners agree. Employers list paid leave as one of the top three most important benefits to their workforce, according to the Society for Human Resource Management (SHRM).

What Are the Benefits of Offering Paid Holidays?

SHRM reports that paid time off correlates with:

• Increased productivity
• Increased engagement
• Better physical wellness
• Positive employer brand

While SHRM focused on paid time off in general, these benefits can extend to paid holidays as well.

Whether a business offers paid holidays and which holidays it chooses depends on the industry and the organization’s culture. However, from a more anecdotal perspective, employees want to spend holidays with their friends and families. Offering paid holidays helps them feel like the organization cares about their life beyond the job—gaining their loyalty and boosting satisfaction.

The Most Common Paid Holidays

According to a Bureau of Labor Statistics (BLS) survey from 2018, American workers get an average of eight paid holidays per year, with over three out of four civilian workers receiving paid holidays.

Below are the most common paid holidays across all sectors (civilian, public, and government):

• Memorial Day
• Independence Day
• Labor Day
• Thanksgiving Day
• Christmas Day
• New Year’s Day

Employers may also choose to give other federal holidays as paid holidays. For more information, get a closer look at federal holidays here.