VACATION PAY YEA OR NAY

Robin Noah

Robin Noah

 

Every year about this time I receive calls regarding holiday time off and pays so here are a few reminders.

Employers do not have to offer time off on nationally recognized holidays. However, an employer is obligated to provide reasonable accommodation for the religious practices of its employees unless it can show that the accommodation would result in undue hardship for its business.

Many employers offer a “floating holiday” in addition to the regularly scheduled holidays. This allows an employee to take time off for religious observances that are not covered by the employer’s established holiday schedule. Make sure your company policy clearly explains the company rules. While most employers provide the same holiday benefits, equally within the company’s policy, it is not a requirement as long as the rules are not discriminatory.

Employers do not have to pay Hourly employees for time off on a holiday. They are only required to pay hourly employees for time actually worked.

On the other hand, Exempt employees who are given the day off, must be paid their full weekly salary if they work any hours during the week in which the holiday falls. This requirement for exempt employees did not change under the new federal overtime regulations.

If an employer provides paid holidays, it does not have to count the paid hours as hours worked for purposes of determining whether an employee is entitled to overtime compensation. An employee must actually work 40 hours in a week before he/she is eligible for overtime. Collective bargaining agreements and/or government employers may have contracted other provisions for determining overtime.

Employer’s policy statements should clearly explain the criteria for Holiday time off, including the proration of the amount of holiday pay due to a part-time employee. For example some companies as a matter of policy do not provide Holiday pay to part-time employees.

Use it or lose it: In California, vacation pay is considered another form of wages and as such cannot be taken away from an employee under any “use it or lose it” scenarios. “Use it or lose it” policies should be clearly communicated to all workers in employment policy manuals. If applicable be sure to check your collective bargains agreement or any other legally contracted agreement in your company. Remember that in California vacation earned is considered wages due and payable at the employment separation.

All information in this article is general, not intended to be legal advisement. Please contact your legal advisor for applicable laws.

Author:  Robin Noah, Executive Coaches of Orange County, www.ECofOC.org