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What Is Holiday Pay?

When Employees Are Paid for Holidays


Number one at a one dollar bill.
Maria Toutoudaki / Stockbyte / Getty Images

Definition: Holiday pay is compensation for holidays, like Christmas Day, or other time not worked (like vacation) when a business may be closed or the employee is permitted to take time off from work.

If you work for the Federal Government, you'll get ten paid holidays each year. Many state, local and private employers follow the same holiday schedule and also provide holiday days off or pay for working on a holiday.

However, The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays. These benefits are generally an arrangement between an employer and an employee or the employee's representative i.e. a union or other collective bargaining agent.

Employers are not required to pay extra (over and above your normal rate) for working on a holiday unless you have a contract that stipulates holiday pay. Companies aren't required to give you the holiday off from work either.

Read More: Vacation Pay | Paid Time Off

Also Known As: vacation pay, paid holidays

Examples: George was entitled to holiday pay from his employer for Memorial Day and Labor Day.

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