Do Employers Have to Pay Double Time for Working on a Holiday in the U.S.?

Understanding the laws and regulations surrounding holiday pay, particularly regarding double time, can be complex and varies depending on the location, company policies, and collective bargaining agreements. In this article, we delve into the specifics for the United States and provide a comparative look at New Zealand's holiday pay laws.

U.S. Labor Laws and Holiday Pay

In the U.S., employers are not legally required to pay double or even triple time for working on a holiday. Unlike some countries, U.S. labor laws do not specify any special provisions for compensating employees on holidays. However, there are certain conditions and exceptions to consider.

Non-Exempt Employees

For non-exempt employees—those who are not subject to the Fair Labor Standards Act (FLSA) exemptions—there is a legal requirement to pay overtime pay for hours worked over 40 in a workweek. This overtime pay is typically time and a half. The term “holiday” does not have a special legal definition in relation to overtime pay. The key factor is whether the employee has worked beyond the 40-hour threshold.

Union Contracts and Collective Bargaining Agreements

In cases where there are union contracts or collective bargaining agreements in place, the terms regarding holiday pay can be different. There, it is common to see provisions for double time or even triple time for working on holidays. Unions often negotiate these agreements to protect their members' interests, ensuring fair compensation for working on these days.

Exempt Employees

Exempt employees, such as managers, professionals, and administrative staff, are paid a set salary and are not legally entitled to overtime pay for hours worked. This includes time worked on holidays. However, under the FLSA, employers are still required to pay for any days in which work is performed.

Banking Overtime

Some employers may choose to pay employees for hours worked on holidays as if they were overtime hours (time and a half). This is a common practice to incentivize employees to work on holidays. However, this is not a legal requirement and is typically a company policy rather than mandated by law.

Comparative Analysis: New Zealand's Labor Laws and Holiday Pay

In New Zealand, holiday pay laws are more stringent compared to the U.S. Here, if an employee is required to work on a public holiday, they must be paid at least time and a half, or a higher rate if agreed upon. Additionally, employees are entitled to a ‘lieu day'—a day off in lieu of the holiday pay—unless the employee is specifically hired to work on public holidays.

Exception for Public Holiday Employment

There is an exception for those who are specifically employed to work public holidays, such as part-time employees working in retail or hospitality industries. In such cases, the terms of employment often dictate the compensation for working public holidays.

Employer Flexibility and Payment Conditions

Employee flexibility in New Zealand also allows employers to offer "payment in lieu” of a lieu day. However, employers are not legally permitted to insist on payment in lieu unless the employee has been owed a lieu day for more than one year. Unlike some other countries where public holidays are considered a health and safety requirement, in New Zealand, the day off is to be taken, not paid out for.

Conclusion

While U.S. labor laws do not mandate double or triple time for working on holidays, these provisions can be found in union contracts or company policies. The key factors for understanding holiday pay in the U.S. include whether the employee is exempt or non-exempt, the presence of a union contract, and company-specific policies. In contrast, New Zealand's laws provide for greater protections and flexibility, ensuring that employees are adequately compensated for working on public holidays.