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What does the law say about getting paid on federal holidays?

Labor Day is a federal holiday and most government employees receive holiday premium pay if they are required to work, or are provided a paid day off. Employees of private businesses, outside of just a couple of states, are generally not required to be paid extra or provided time off, unless the business has agreed to do so:

  • As part of an Employment Contract.
  • In their employment policies.
  • In an Employee Handbook.

The Fair Labor Standards Act does not require an employer to pay for time an employee does not work, such as vacations or holidays. Although many employers provide paid time off for Labor Day, there is generally no requirement for a private employer to provide either time off or paid time off at the federal level.

There is also generally no requirement at the federal level that an employer provide extra pay, such as time-and-a-half or double time, for holiday work. Many employers, however, do provide additional pay to employees that work on Labor Day, and other holidays as a benefit or an employment incentive.

Do state laws impact holiday pay rates?

Most states do not require an employer to provide holiday pay. Massachusetts and Rhode Island, however, both have state laws regarding holiday pay.

Massachusetts' holiday pay laws vary depending on the type of business. The three categories of businesses that the holiday pay laws apply to include:

  • Retail establishments.
  • Non-retail establishments.
  • Manufacturers.

Massachusetts also has a variety of laws, known as the Massachusetts Blue Laws, that control which businesses may legally operate on Sundays and holidays. Some businesses, like retailers, are required to pay 1.1 times the regular pay rate for employees working on Labor Day, Memorial Day, Juneteenth and other holidays. Retailers also may need a permit to open on some restricted holidays and provide premium pay.

In Rhode Island, work performed on a legal holiday, such as Labor Day, must be paid at a rate of 1.5 times the normal rate of pay for that employee. If a legal holiday is on a Sunday, then the following day is observed as the legal holiday for purposes of determining holiday premium pay. Labor Day is a legal holiday in Rhode Island, along with Thanksgiving Day, Christmas Day and a number of other holidays. Some companies that operate seven days per week, however, are exempt from the Rhode Island holiday premium pay laws.

Can an employer offer holiday pay for Labor Day?

Yes, there is no law prohibiting employers from offering holiday pay or time off as a benefit to their employees. Although it is not required in most states, many employers do provide holiday pay, or time off, on Labor Day. According to the U.S. Bureau of Labor Statistics, 91% of civilian workers spend Labor Day as a paid holiday.

An Employment Contract, or Employee Handbook, may specify whether Labor Day and other holidays are paid holidays. Employers frequently include policies regarding time off for holidays and overtime pay rates in their Employee Handbooks.

Employers may want to consider updating their Employee Handbook if it has not been updated recently. It can not only explain holiday pay policies, but it may also provide an employer with legal protections, and tell employees about benefits, work expectations, and more. A well done Employee Handbook saves time when onboarding new employees, and existing employees can reference it to learn about the policies that apply to them.

If you have more questions about holiday pay on Labor Day or other holidays, reach out to a Rocket Lawyer network attorney for affordable legal advice.

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.

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