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Do Employers Have to Give Time Off for Federal Holidays?

Do Employers Have to Give Time Off for Federal Holidays?

Depending on your organization’s industry, most employees expect to have company-wide days off for certain holidays. However, are employers legally required to offer time off for federal holidays like Martin Luther King, Jr. Day and Presidents Day? With the start of the new year, read on for things that employers should keep in mind regarding paid time off policies and federal holidays.


What Days are Federal Holidays?

There are at least ten days a year that are designated by the United States government as federal holidays. Depending on the year, there might be an extra day or so. For example, this year's presidential inauguration on January 20th warrants an extra federal holiday on Inauguration Day.

Otherwise, the federal holidays that occur every yearand their dates in 2021are the following:

January 1 New Year's Day
January 18 Martin Luther King, Jr. Day
February 15 Washington’s Birthday (Presidents Day)
May 31 Memorial Day
July 4 (observed on July 5, since it falls on a Sunday) Independence Day
September 6 Labor Day
October 11 Columbus Day
November 11 Veterans Day
November 25 Thanksgiving Day
December 25 (observed on December 24, since it falls on a Saturday) Christmas Day


Are Employers Legally Required to Offer Federal Holidays Off?

Employers are not required to pay for time off on holidays, but many choose to observe some of those days and pay employees for the day off as a way of boosting employee retention and attracting new employees. Some employers don’t automatically offer paid time off for holidays, but instead offer paid time off policies that allow employees to choose when they want to take days off.

Other employers implement holiday pay if their employees do work those days. Average holiday pay is typically equivalent to overtime pay, which is 1.5 times the normal hourly pay, but it’s not required.

It’s recommended that all employers have a time off in place. When creating a policy, here are important details to include: 

  1. What employees are eligible (exempt, nonexempt)
  2. Which dates are designated as paid holidays 
  3. If there are any special pay rates or bonuses for employees who work on these days 
  4. How these days are observed if they fall on a weekend

What Else Should Employers Keep in Mind?

For most companies, no federally mandated PTO laws exist. However, for government contract work and federally supported contract work that falls under the McNamara O'Hara Service Contract Act (SCA) or Davis-Bacon and Related Acts (DBRA), it may be mandatory to offer paid time off. Each of these acts uses the prevailing local standard for fringe benefits to determine if PTO needs to be offered. So, if the prevailing local standard is to offer PTO, then PTO must be offered. 

If an employer offers paid leave, it is important to note that it must be done in accordance with the standards of the Equal Employment Opportunity Commission (EEOC). This means that an organization’s PTO policy must not discriminate on the basis of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability, or genetic information. Employers, however, can segment PTO policies based on tenure, location, time commitment (i.e. part-time vs. full-time), and other factors. 

HR teams should research the PTO laws that correspond to the state in which their company does business to ensure that the organization remains compliant. If issues are discovered, HR can consider conducting a PTO audit to review and update the policy (doing so could boost recruitment and retention). 

2021 HR Calendar Call to Action

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