No federal law requires private employers in the United States to provide paid holidays. The Fair Labor Standards Act does not mandate payment for time not worked, including holidays. Whether employees receive paid holidays is entirely up to the employer.
A few states do have their own holiday pay rules, though, and how you handle holiday closures affects exempt and non-exempt employees differently. This article covers federal and state legal requirements, explains how holiday pay works for each employee type, and outlines what your policy should include.
Is holiday pay mandatory?
Under federal law, no. The Fair Labor Standards Act (FLSA) requires employers to pay employees only for hours actually worked. It does not require payment for holidays, vacations, or other time off. Private employers can choose to offer paid holidays as a benefit, but they have no legal obligation to do so.
This applies to all private sector employers regardless of size or industry. Federal employees, by contrast, are entitled to all 11 federal holidays as paid days off under 5 U.S.C. 6103.
Many employees assume paid holidays are a legal right. They are not. They are a benefit that most employers choose to offer. According to the Bureau of Labor Statistics, about 79% of private industry workers have access to paid holidays, and the average private sector worker receives about 8 paid holidays per year.
Federal holidays in the United States
The federal government recognizes 11 official holidays:
- New Year’s Day (January 1)
- Martin Luther King Jr. Day (third Monday in January)
- Presidents’ Day (third Monday in February)
- Memorial Day (last Monday in May)
- Juneteenth (June 19)
- Independence Day (July 4)
- Labor Day (first Monday in September)
- Columbus Day (second Monday in October)
- Veterans Day (November 11)
- Thanksgiving Day (fourth Thursday in November)
- Christmas Day (December 25)
Federal employees receive paid time off on all 11. Private employers are not required to observe any of them, though most offer at least 6 as paid days off. For exact 2026 and 2027 dates and observation rules, see our paid holidays guide for employers.
Holiday pay rules by employee type
How you handle holiday pay depends on whether the employee is exempt or non-exempt under the FLSA.
Exempt (salaried) employees
If your company closes for a holiday and the closure lasts less than a full workweek, you must continue to pay exempt employees their full salary. The FLSA requires that exempt employees receive their full weekly salary without deductions for employer-directed closures shorter than one week. Failing to pay an exempt employee for a holiday closure could jeopardize their exempt status.
You can require exempt employees to use accrued PTO or vacation time to cover the closure. But if they have no accrued time available, you still must pay them.
Non-exempt (hourly) employees
You are only required to pay non-exempt employees for hours actually worked. If the company closes for a holiday and a non-exempt employee does not work, you do not have to pay them for that day unless your company policy says otherwise.
If a non-exempt employee works on a holiday, they must receive at least their regular hourly rate. Federal law does not require a premium rate such as time and a half or double time for holiday work. Premium pay on holidays is a company decision.
One thing to watch: if working the holiday pushes total hours above 40 for the week, the hours over 40 must be paid at 1.5 times the regular rate. That is the standard FLSA overtime rule, not a holiday-specific provision.
Part-time employees
There is no federal requirement to provide paid holidays to part-time workers. Whether they receive holiday pay depends on company policy. Some employers extend holiday benefits to part-time staff, sometimes on a prorated basis. Others limit paid holidays to full-time employees only.
Union employees
If employees are covered by a collective bargaining agreement (CBA), holiday pay terms are part of the contract. A CBA may require specific paid holidays, premium pay for holiday work, or other benefits beyond what federal law requires. Always check the applicable agreement before setting holiday pay policy for union-covered workers.
State holiday pay laws
Most states follow the federal standard: no requirement for private employers to provide holiday pay. The exceptions worth knowing about:
Massachusetts
Massachusetts has some of the most specific holiday work regulations in the country, known as the Blue Laws.
Non-retail businesses cannot operate on certain restricted holidays, including Memorial Day and Labor Day. Retail businesses can operate on restricted holidays but need a permit from their local police department and approval from the state’s Division of Occupational Safety.
Retail employees cannot be required to work on Christmas, Columbus Day (before noon), Thanksgiving, or Veterans Day (before 1:00 PM) without a permit. On other restricted holidays, they can work without a permit but have the right to refuse.
Rhode Island
Rhode Island requires premium pay for most employees who work on state holidays or Sundays. Under R.I. Gen. Laws § 5-23-2, employees who work on a designated holiday must receive time and a half, regardless of total weekly hours worked. The covered holidays include New Year’s Day, Memorial Day, Juneteenth, Independence Day, Victory Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas.
California
California does not require private employers to provide holiday pay or time and a half for holiday work. There is no state law mandating that employers close on any particular day or pay employees for holidays they do not work.
Employees who work on a holiday must receive their regular hourly rate. Standard California overtime rules still apply: hours over 8 in a day or 40 in a week must be paid at the overtime rate.
Other states
Texas, Arizona, Tennessee, Alabama, Florida, and most other states do not require private employers to provide holiday pay or premium pay for holiday work. Holiday pay in these states is at the employer’s discretion.
What happens when a holiday falls on your day off
Federal law does not address this for private employers. The federal convention for government employees is to observe Saturday holidays on the preceding Friday and Sunday holidays on the following Monday. Many private employers follow this approach, but they are not required to.
Whether you give employees a substitute day off when a holiday falls on their regular day off is a policy decision. Include the rule in your employee handbook so people know what to expect.
For non-exempt employees, the question is simple: if they do not work, there is no legal obligation to pay them for the day. For exempt employees, their salary continues for the full week regardless.
How to build a compliant holiday pay policy
A written policy prevents disputes and keeps your company compliant with federal and state law. The elements to cover:
Which holidays your company observes. List each paid holiday by name. Most companies start with the core 6 (New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas) and add from there based on industry norms.
Eligibility. Specify who qualifies: full-time employees only? Part-time workers after a waiting period? Temporary or seasonal staff?
Pay for holiday work. If some employees must work on holidays, document the compensation: regular rate, time and a half, double time, or compensatory time off. None of these is federally required, but your policy should state what your company offers.
Weekend observation. How does your company handle holidays that fall on Saturday or Sunday? The federal convention (Saturday to Friday, Sunday to Monday) is common but not mandatory for private employers.
Holidays during PTO. Clarify whether paid holidays count against PTO balances when an employee is on vacation during a holiday week. Most employers exclude the holiday from the PTO count.
Exempt employee protections. Confirm that exempt employees receive their full salary during holiday closures shorter than one workweek, consistent with FLSA requirements.
State compliance. If you operate in Massachusetts, Rhode Island, or other states with holiday-specific rules, include the applicable requirements in your policy.
For a step-by-step guide to building your holiday policy and setting up your company’s schedule, see our paid holidays guide for employers.
Managing holiday pay compliance with actiPLANS
Tracking holiday pay across different employee types, locations, and state-specific rules adds up, especially for companies that operate in more than one state.
actiPLANS lets you set up separate holiday calendars for different locations, so employees in Massachusetts see their state’s rules while employees in Texas see theirs. The system excludes paid holidays from PTO balances automatically when employees request time off during holiday weeks. Managers and employees see the full schedule on a shared timeline, which cuts down on questions about which days the company is closed.
Start a free 30-day trial to see how it works, or book a demo for a walkthrough.
FAQ
What holidays are you supposed to get paid for?
No specific holidays are legally required as paid days off for private sector employees. The FLSA does not mandate paid holidays. The most commonly offered paid holidays are New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. Which holidays you receive as paid days off depends on your employer’s policy.
Are paid holidays mandatory in the US?
No. Federal law does not require private employers to provide paid holidays. Massachusetts and Rhode Island have specific rules about holiday work and premium pay, but even those states do not require that all holidays be paid days off for all workers.
What happens if a paid holiday falls on your day off?
Your employer’s policy determines this. There is no federal law requiring a substitute day off or extra pay when a holiday falls on your regular day off. Many employers follow the federal convention of observing Saturday holidays on Friday and Sunday holidays on Monday, but this is a choice, not a requirement.
Does my employer have to pay time and a half on holidays?
No. Federal law does not require premium pay for holiday work. Your employer must pay at least your regular rate, but time and a half or double time is not required by federal law. Rhode Island is one of the few states that does mandate premium pay for holiday work. If working the holiday pushes your hours over 40 for the week, standard FLSA overtime rules apply.
