Holidays and Federal Holiday Pay

A holiday is an annual day set aside in law or custom where public activities, particularly work or business involving occupation, education and also church are banned or suspended. In general, most holidays are meant to let people to celebrate or remember an occasion or religious or cultural meaning. It is estimated that in the United States, nearly 70% of the total yearly income is spent on holidays. Holidays, in some cultures, are considered to be sacred and therefore are not considered as work and are always attended by people of all age groups and backgrounds.


The Department of Labor has published Federal Law regarding holiday pay. The Fair Labor Standards Act (FLS) outlines what the standards are for holiday pay. In essence, the act covers all employees including: executive, administrative, management, groundskeepers, truck drivers, and technicians. The law requires all employers to offer their employees, either in addition to regular holiday pay, payment in full for all scheduled holidays. In addition, employers who do not offer holiday pay are subject to fines of up to two thousand dollars per employee each year.

There are many benefits to employees who take vacation pay into account when computing for holiday pay. Vacation pay reduces the amount of time that an employee works in a week and, therefore, lowers the amount of time that he or she would have to work in a week to receive his or her regular rate of pay. For instance, instead of eight hours of regular rate vacation pay, an employee’s regular rate would be eight hours plus twenty-five minutes of vacation pay. If this employee were to continue working forty hours in a seven-day period, then his or her vacation time pay would equal the regular rate of pay, or eight hours. Employers who choose to exclude vacation pay must calculate their employees’ regular rate from the start of the holiday until the end of the same holiday.

Many employers also provide extra holiday pay when employees take time off for the holidays. Overtime pay is not taxable; however, when an employee takes a holiday, some businesses provide a further holiday pay. These businesses usually charge an extra fee.

It is legal to include vacation pay in the calculation of an employees’ regular rate of pay for holidays, but some employees may not prefer to take vacation pay into account when computing their holiday pay. If an employee chooses not to accept vacation pay, he or she may be charged tax on the full holiday pay, even if it was not included in the employees regular rate of pay. If the employee continues to work on holidays, his or her holiday pay will be reduced until it equals or matches the regular rate of pay. Some people prefer to take vacation pay into account and then put the remainder of their regular pay in an interest-bearing savings account. Others prefer to redeem their unused vacation days for actual cash, or for gift cards and merchandise.

The terms and laws of the holiday pay holiday vary from state to state. In general, however, the laws will be similar. In some states, non-cancellable holidays (such as national holidays and Good Friday) are excluded from the calculation of holiday pay. In other states, non-cancellable hours (including sick leave, vacation and holiday pay) are included in the holiday calculation. The federal government is required to publish a list of public holidays, along with local laws, which generally specify rules about when these holidays apply.