While we all may agree that the Fourth of July is a joyous time of year, for small business employers, it can also be confusing. After all, the Fourth of July is a federal holiday, and employers and employees often wonder whether holiday pay, time and a half, or maybe even double time pay is required.
Below, you’ll learn about how to pay employees on the 4th of July.
Need pay and benefits documents for your employees?
Put your compensation and time off policies in writing.
We make it affordable and simple.
How does holiday pay work for Independence Day?
There is no federal law requiring private employers or small businesses to pay employees time and a half on Independence Day, and that’s true for any other holiday. Federal, state, and local government employees are usually provided time off or paid overtime for work on the Fourth of July. So that means how holiday pay works will depend on state labor laws and an employer’s policies.
Most businesses only have to provide holiday pay or time off if they have a policy or common practice of paying overtime or providing paid time off on holidays.
When it comes to state laws, there are only two states that require holiday pay, and both include Independence Day in their list of holidays: Massachusetts and Rhode Island. For more information about these state’s holiday pay rules, ask a lawyer or visit the labor department website for each state:
Are workers paid time and a half or double time for overtime on the Fourth of July?
Outside of government employment, and Massachusetts and Rhode Island, unless an employer has affirmatively agreed to pay overtime or double time for all hours worked on holidays, then this is entirely up to the employer. In the states that require holiday pay, or premium pay as it is sometimes called, qualified employers in Rhode Island are required to pay time and a half, while those qualified employers in Massachusetts must pay a 20% premium, or 1.2 times the rate.
It is important to note, however, that if an hourly employee works more than a 40-hour week as a result of the holiday, then federal and state overtime laws will likely apply. Alaska, California, Colorado, Nevada, and Oregon have additional overtime pay laws that apply to the number of hours worked in a single day.
California is the only state that requires double time in certain situations. Double time is required when an employee works more than 12 hours in a day or works more than 8 hours on their seventh consecutive day of work.
What happens to worker pay when the 4th of July falls on a weekend?
When a holiday falls on a Sunday, the states that require premium or overtime pay for July 4th (currently Massachusetts and Rhode Island), extend the obligation to the “observed” holiday on the following Monday.
Employers that offer holiday pay and time off as a perk may want to provide their employees with a day off on the following Monday when Independence Day falls on a Sunday. This is not, however, required by law. The observed date for Saturday holidays is usually the Friday before.
Employers that extend their hours or schedule additional employees for a weekend holiday may need to pay overtime for those employees that end up working extra hours. For more information about how and whether employers need to pay their employees on holidays, take a look at our guide on federal holidays and overtime.
If a business is closed for the 4th of July, must employees be paid for it?
Private businesses are not required to pay employees when closed for the 4th of July or any other holiday, observed or actual. Paid time off to celebrate holidays is typically a perk or benefit provided to employees in addition to other vacation benefits that may take time to accrue.
How is holiday pay calculated for the Fourth of July?
If you’ve determined that your employees are owed time and a half, or double time, calculating that pay is relatively straightforward.
Time and a half includes a 50% premium. For example, an employee who is regularly paid $10 per hour will receive an additional $5 per hour, bringing their total wage to $15 per hour for each overtime hour.
Double time is a 100% premium. Using the same example, an employee who is regularly paid $10 per hour will receive an additional $10 per hour, bringing their total wage to $20 per hour for each double time overtime hour.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.