Company Holiday Payroll Policies

You may wonder if you are also required to give Tuesday off? And if your company is not taking Tuesday off, do you have to pay your employees extra for working on a U.S. holiday?

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July 2nd, 2017
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Happy 4th of July weekend! Since America’s Independence Day falls mid-week this week, many companies are offering Monday as a day off.  But, as an employer, you may wonder if you are also required to give Tuesday off? And if your company is not taking Tuesday off, do you have to pay your employees extra for working on a U.S. holiday?

For small business owners, a paid holiday means extra payroll out and less cash flow in. But the question most of my small business owner clients ask is:  Does the government require companies to pay time-and-a-half for working on Independence Day? The answer is mixed when it comes to paid holidays. Here is what I tell my clients:

  • NO HOLIDAY REQUIREMENT – U.S. federal law does not mandate paid holidays. That means an employer does not have to offer a day off for any holidays, paid or unpaid. State laws vary, so check your state for details. In Florida, the state has no laws requiring an employer to give vacation or holiday leave to employees.
  • EXEMPT SALARIED EMPLOYEES – There is no mandate to give employees a paid holiday or even the day off.  However, if you hire an employee and give them a salary, then even if you close up shop on July 4th, you must pay all exempt salaried employees for the whole week.
  • EMPLOYEE MORALE & BENEFITS – No one wants to work on a holiday. Employee productivity often decreases. To boost employee morale, some companies decide to offer holidays, such as 4th of July or Christmas, off as a company benefit and to boost employee morale. Like I always say, a happy employee is a productive one!
  • COMPANY POLICY – Whether or not you decide to offer certain holidays off each year, make sure you post detailed information in your company policy. Be specific: is the entire company closing down? Will you open for business, but offer time and a half pay to employees who work the holiday? Write it down, so you don’t get called out, or even worse, sued by an employee later.

So have a BBQ and celebrate the 241st anniversary of freedom in America, but make your company holiday policy clear, so you won’t be caught in the middle of a fireworks storm. The only fireworks I want you to see are the ones in the sky this 4th of July!

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