Thanksgiving, Christmas, and New Year’s are right around the corner, and so are the questions. Do we have to pay employees for the holiday? Do people who work on Christmas get time and a half? What about salaried staff when the office is closed?
For Utah employers, the short answer is that holiday pay is mostly up to you. The longer answer is that your written policy, and how consistently you follow it, matters a lot. Here’s what the law requires and how to build a holiday policy that’s fair and easy to manage.
What Federal Law Says About Holiday Pay
The Fair Labor Standards Act (FLSA) does not require private employers to:
- Give employees paid time off for holidays
- Close on holidays
- Pay a premium, like time and a half or double time, for working on a holiday
Under federal law, a holiday is treated like any other workday unless your own policy says otherwise.
What Utah Law Says About Holiday Pay
Utah follows the same approach for private employers. There’s no state law requiring paid holidays or premium pay for holiday work. Public employers have their own rules, but most small and midsize Utah businesses are free to set their own holiday policy.
That freedom comes with responsibility. Once you promise holiday pay in a handbook, offer letter, or written policy, you’re expected to honor it. For a broader look at the state’s rules, see our guide to Utah labor laws.
How Holiday Pay Affects Overtime
This is where many employers get tripped up. For non-exempt employees, overtime is based on hours actually worked over 40 in a workweek.
- Paid holiday hours that aren’t worked generally don’t count toward the 40 hours. If an employee works 36 hours and gets 8 hours of holiday pay, they’re paid for 44 hours but aren’t owed overtime.
- A holiday premium you choose to offer may affect the regular rate used to calculate overtime, depending on how it’s structured. It’s worth checking with your payroll provider before you set it up.
Not sure which employees are exempt? Our post on exempt vs. non-exempt employee status walks through the basics.
Salaried Exempt Employees and Holiday Closures
If you close for a holiday and an exempt employee is ready and able to work the rest of the week, you generally can’t dock their salary for the closed day. You can often require them to use paid time off for the day if your policy allows it, but their salary itself should stay whole for that week.
What a Good Holiday Policy Includes
A clear holiday policy prevents confusion and complaints. Here’s what to cover:
- Which holidays you observe. Most employers choose six to ten, often including New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. Some add Pioneer Day for Utah teams.
- Who’s eligible. Full time, part time, new hires, and seasonal workers.
- Eligibility rules. Some employers require employees to work their scheduled day before and after the holiday to receive holiday pay.
- What happens when a holiday falls on a weekend. Will you observe it on the Friday before or the Monday after?
- Holiday work. If someone works a holiday, do they get premium pay, a different day off, or regular pay?
- Floating holidays. These give employees flexibility to choose their own day, which can help a diverse team.
- How holidays interact with PTO. Make it clear whether a holiday during a vacation counts as PTO.
Put it in writing and include it in your handbook. Our guide to an employee handbook for small business covers what else belongs there.
Apply It the Same Way for Everyone
Inconsistency is the biggest risk with holiday pay. If one manager gives paid holidays to part-time staff and another doesn’t, you’ve created a fairness problem and possibly a legal one. Train managers on the policy and run holiday pay through payroll the same way every time.
Get Help Getting Holiday Pay Right
Holiday pay touches payroll, overtime, PTO, and your handbook all at once. If you’d rather not sort it out on your own every December, our team can help. We handle payroll outsourcing and HR outsourcing for Utah businesses, including policy reviews that keep you compliant and your people happy.
Contact us to talk with our team.
This article is for general information and isn’t legal advice. For guidance on a specific situation, talk with an HR professional or employment attorney.
