What Are Paid Holidays in the US?
Understanding Paid Holidays and Why Employers Want to Provide Them
The Fair Labor Standards Act (FLSA) does not require employers to pay employees for time not worked, such as vacations or holidays. Paid holidays, paid vacation, and paid sick leave are determined by the employer, or in a represented workplace, by the employee's representative, often a union, in negotiation with an employer.
Paid Holidays Are Negotiated by Some Employees
Paid holidays may also be negotiated by employees who have a contract with employers; these are often senior level employees. Senior level employees are more apt to have come from positions in other organizations where their seniority gave them the maximum paid holidays and vacation time.
They are unlikely to settle for less time off if they take a new position. In fact, if an employer fails to provide equivalent paid vacation and holiday time, this may be considered a deal breaker by the prospect—even if they don't typically use all of the time available.
Employees in exempt professional, technical, or managerial positions such as software developers, HR staff, controllers, and marketing, expect paid holidays to accompany their employment. Such employees are unlikely to accept positions in companies that don't offer paid time off for holidays.
Nonexempt and Contract Employees Are Treated Differently
Nonexempt, or hourly, employees are less likely to have paid holidays, or they receive fewer paid holidays than their exempt or salaried counterparts. Part-time and temporary employees rarely have paid holidays.
Contract employees or consultants do not receive paid holidays—and they don't expect them. But, a contract worker who is employed by the contracting company, not the employer whose job site they work in, may receive paid holidays from the contracting company.
Paid Holidays in the US for All Employees
Paid holidays are a normal part of a compensation and benefits package offered by employers to attract and retain employees. They are usually listed in an employment offer letter and appear in an employee handbook.
Increasingly, competitively paid holidays and other time off benefits are becoming crucial to an employer's ability to attract the best employees who have skills that are critical for the operation of the business.
The Bureau of Labor Statistics states that for the category all full-time employees, ”Seventy-seven percent of private industry workers had access to paid holidays in March 2017. On average these workers received 8 paid holidays." Professional, technical and related employees average 8.5 paid holidays while clerical and sales employees average 7.7 paid holidays. Blue collar and service employees have, on average, 7.0 paid holidays.
Federal employees have an annual schedule of paid holidays that is established by the U.S. Office of Personnel Management. Business Owner's Toolkit from Wolters Kluwer offers a handy guide to paid holidays by the state.
Common Paid Holidays
The most common paid holidays in the U.S. are the following:
- New Year's Day,
- Memorial Day,
- Independence Day (4th of July),
- Labor Day,
- Thanksgiving Day, and
- Christmas Day.
Additionally, some organizations add:
- Washington's Birthday or President's Day,
- Good Friday,
- Martin Luther King, Jr. Day,
- Veterans' Day,
- Columbus Day,
- Friday after Thanksgiving,
- Christmas Eve, and/or New Year's Eve.
Other companies offer a floating paid holiday that employees can take as needed. Approximately 30 percent of employers offer floating holidays according to a study by the Society of Human Resource Management (SHRM). (You must be a member to access the paid holiday information.) Other companies offer paid holidays for the employee's birthday, and/or for election day.
Related to Paid Holidays
Overall, paid holiday leave provided by employers was most common for secular holidays. The SHRM study found that the percentage of employers who closed for each of these holidays was as follows.
New Year’s Day: Sunday, January 1 (90%)
Monday after New Year’s Day: Monday, January 2 (72%)
Martin Luther King, Jr. Day: Monday, January 16 (39%)
Chinese and Vietnamese New Year: Saturday, January 28 (2%)
President’s Day: Monday, February 20 (34%)
Ash Wednesday: Wednesday, March 1 (0%)
The first day of Passover: Tuesday, April 11 (less than 1%)
The second day of Passover: Wednesday, April 12 (less than 1%)
Good Friday: Friday, April 14 (27%)
Easter Sunday: Sunday, April 16 (51%)
Monday after Easter: Monday, April 17 (4%)
Friday before Memorial Day: Friday, May 26 (3%)
The beginning of Ramadan: Saturday, May 27 (2%)
Memorial Day: Monday, May 29 (93%)
The floating holiday or several floating holidays give employees the opportunity to use paid time off to celebrate religious holidays. Employees can also use PTO, personal days, or paid vacation days to get paid for religious commemorations and family time off.
- New Years Day and/or Thanksgiving Day (99%)
- Labor Day and/or Memorial Day (98%)
- Independence Day (97%)
When Employees Must Work on Paid Holidays
The SHRM study cited earlier found: "More than half (57%) of respondents indicated their organizations pay a premium for employees working on a holiday when the organization would normally be closed. Of these organizations, 40% pay double-time and 21% pay one-and-a-half-time, while 19% pay overtime and 21% pay some other type of premium."
See an example of a common paid holiday schedule for the private sector and the public sector in the U.S.