Compliance guideRead at source, 23 September 2026
Holiday Pay Laws: What Federal Law Requires (Nothing), Which States Add Rules, and How Holiday Premium Counts Toward Overtime
No federal law requires a private employer to give paid holidays or to pay extra for working on one. The Department of Labor is explicit: the Fair Labor Standards Act “does not require payment for time not worked, such as vacations or holidays,” and does not require overtime for holiday work “as such.” Holiday pay is a policy choice — with three exceptions worth knowing. Rhode Island still requires time and a half for most retail work on Sundays and holidays; Massachusetts ended its retail holiday premium on January 1, 2023 but still protects retail workers who refuse holiday shifts; and when you do pay a holiday premium of at least time and a half, federal rules let you credit it toward overtime owed that week.
Federal holiday pay law: what the FLSA does and does not require
Three things are true under federal law for private employers:
- No paid holidays are required. The FLSA does not require payment for time not worked, and the federal holiday calendar governs federal employees and offices, not private payrolls.
- No holiday premium is required. Fact Sheet 23: “The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such.” An hourly employee who works eight hours on Christmas Day is owed their regular rate for those hours, and overtime only if the week passes 40.
- Offering holidays off is not required either. Unless a state law or a contract says otherwise, an employer can schedule work on any holiday.
Two groups are different. Salaried exempt employees are generally paid their full salary for any week in which they do some work, so an employer-declared holiday closure cannot be deducted from their pay. And federal contractors may owe holiday pay under their contract’s wage determination. Our page on exempt vs non-exempt covers the salary basis rule.
How holiday pay interacts with overtime
This is where most payroll mistakes happen, and the rules run in two directions.
Pay for a holiday not worked
Under 29 CFR 778.218, pay for an idle holiday “may be excluded from the regular rate of pay,” and “no part of such payments may be credited toward overtime compensation due under the Act.” In practice: paid holiday hours are not hours worked, so they do not push the week toward 40; they do not raise the regular rate; and they cannot be used to offset overtime.
Premium pay for working on a holiday
Under 29 CFR 778.203, extra pay at a premium rate of at least time and a half for work on holidays “may be treated as an overtime premium for the purposes of the Act”: it stays out of the regular rate and can be credited toward overtime due. If you pay less than time and a half as a holiday premium, it is treated differently: it goes into the regular rate and cannot be credited.
A worked example
An associate earns $18.00 an hour and works eight hours on Christmas Day at time and a half, $27.00. The extra $9.00 an hour, $72 for the shift, is holiday premium. If the associate works 48 hours that week, eight hours of overtime are due at an extra $9.00 each, also $72. Because the premium was at least time and a half, the $72 already paid can be credited against the $72 of overtime premium owed. If the week stays at 40 hours, no overtime is due, and the $72 is simply the holiday premium.
Daily overtime states such as California and Alaska add their own layer; the state-by-state rules are on our overtime laws by state page.
States with holiday pay rules
| State | Rule | Source |
|---|---|---|
| Rhode Island | Retail work on Sundays and holidays must be paid at least time and a half, with a guaranteed minimum of four hours, and is voluntary. Some businesses, including bakeries and pharmacies, are excepted from the premium and voluntary-work provisions. A separate chapter on permitted Sunday and holiday work (25-3) also sets a time-and-a-half rate, with its own exceptions. | R.I. Gen. Laws 5-23-2; 25-3-3 |
| Massachusetts | Retail holiday and Sunday premium pay requirements were eliminated effective January 1, 2023. Overtime over 40 hours still applies, including hours on a holiday, and at retail stores with more than seven people a refusal to work a holiday cannot be grounds for discipline, dismissal or reduced hours. | Mass.gov; M.G.L. c.136 §16 |
| Every other state | We found no general private-sector holiday pay requirement to report. Check state blue laws that restrict opening hours in some industries, and any local ordinances. | — |
If you have read that Massachusetts requires time and a half on holidays, that was true for retail before 2023. The premium was phased out under the 2018 minimum wage legislation, and the state’s own guidance now says so.
Holiday pay for hourly employees: what you owe, what is customary
For hourly employees, federal law requires only that you pay for the hours they actually work on a holiday, at their regular rate, plus overtime if the week goes past 40 hours. Anything more, whether a paid day off or a premium for working, comes from your policy, a contract or a state rule such as Rhode Island’s. Here is how the common situations work out under the Fair Labor Standards Act.
| Situation | What federal law requires | Rule |
|---|---|---|
| Works the holiday, week stays at 40 hours or less | Regular rate for hours worked. No premium. | Fact Sheet 23 |
| Works the holiday, week goes over 40 hours | Time and a half for the hours over 40, whichever day they fall on | Fact Sheet 23 |
| Off for the holiday, paid by your policy | Nothing required. If you pay it, the hours are not hours worked and do not count toward 40. | 29 CFR 778.218 |
| Paid a holiday premium of at least time and a half | The premium can be credited toward overtime owed that week | 29 CFR 778.203 |
| Paid a holiday premium below time and a half | The premium goes into the regular rate and cannot be credited toward overtime | 29 CFR 778.203 |
What is customary is a different question, and it splits sharply by hours and pay level. In the Bureau of Labor Statistics National Compensation Survey for March 2025, 81 percent of private industry workers had access to paid holidays. The figure was 92 percent for full-time workers and 50 percent for part-time workers. In service occupations it was 56 percent, and among workers in the lowest 10 percent of wages it was 49 percent. So for many hourly frontline jobs, a paid holiday is a benefit a candidate may not have had before, not a baseline they expect.
Part-time hourly employees
No federal law requires holiday pay for part-time staff. If you give it, the usual choices are to pay the hours the person would have been scheduled that day, or a prorated share of a full-time day. Whichever you choose, write it down, because a part-time employee who sees full-time colleagues paid for Thanksgiving will ask.
Once you promise it, pay it the way you promised
Holiday pay is optional until it is in an offer letter, a handbook or a job ad. After that, employees will hold you to the terms, and state wage payment laws can come into play. Apply eligibility rules, such as working the scheduled shift before and after the holiday, the same way to every hourly employee.
Writing a holiday pay policy
Because the law leaves it open, the policy is what employees will hold you to. A usable policy answers six questions:
Which days count
List them by name. For 2026–27 the ones that affect most frontline schedules are Thanksgiving (Thursday, November 26, 2026), Christmas Day (Friday, December 25, 2026) and New Year’s Day (Friday, January 1, 2027).
Who is eligible
Full-time only, or part-time too; any waiting period for new hires.
What a day off pays
Usually the scheduled hours at the regular rate, or a fixed eight hours.
What working the holiday pays
If you offer a premium, make it at least time and a half so it can be credited toward overtime.
What happens when the holiday falls on a day off
An alternate day, or no additional pay; say which.
Attendance conditions
Many employers require working the scheduled shift before and after the holiday to receive holiday pay. State the rule, and apply it the same way to everyone.
Holiday pay as a hiring lever
For employers who run seven days a week, the holiday premium is one of the few pay levers that costs little across a year and is visible in an ad. “Time and a half on all major holidays” in the first line of a job ad for a care home, a distribution center or a store in November tells a candidate something concrete. Seasonal timing is covered on our peak season staffing page; the practical point is that applicants for December shifts are cheapest to reach in October.
Frequently asked questions
Is holiday pay required by law?
Not under federal law. The Fair Labor Standards Act does not require payment for holidays not worked, and does not require a premium for working on a holiday. A few states add rules; Rhode Island still requires time and a half for most retail work on Sundays and holidays.
Do employers have to pay time and a half on holidays?
Not federally. Time and a half is required only for hours over 40 in a workweek, whether or not they fall on a holiday. Rhode Island requires time and a half for retail work on holidays, and some employers pay it by policy or contract.
Does holiday pay count toward overtime?
Pay for a holiday not worked does not. Under 29 CFR 778.218 it is excluded from the regular rate and cannot be credited toward overtime, and the paid hours are not hours worked. A premium of at least time and a half paid for working on a holiday can be excluded from the regular rate and credited toward overtime owed that week, under 29 CFR 778.203.
Does Massachusetts require holiday pay in 2026?
No premium is required. Massachusetts eliminated retail Sunday and holiday premium pay effective January 1, 2023. Overtime still applies to hours over 40, and at retail stores with more than seven people, employees cannot be penalized for refusing to work a holiday.
Which states require holiday pay?
Among private-sector rules we verified, Rhode Island is the clear one: time and a half for most retail work on Sundays and holidays, with a four-hour minimum and the work voluntary, plus a broader Sunday and holiday premium section. Massachusetts ended its retail premium in 2023. We found no general private-sector requirement elsewhere.
Do part-time employees get holiday pay?
Only if the employer’s policy or a contract provides it. Federal law does not require holiday pay for any private-sector employee, full-time or part-time.
Can an employer require employees to work on holidays?
Generally yes, unless a state law or a contract limits it. Rhode Island makes most retail Sunday and holiday work voluntary, and Massachusetts protects retail employees at stores with more than seven people who refuse holiday work. Religious accommodation obligations can also apply.
Is Thanksgiving a paid holiday?
Only if your policy makes it one. Thanksgiving is a federal holiday for federal employees, but private employers are not required to give it off or pay for it. In 2026 it falls on Thursday, November 26.
Fill the holiday schedule in October, not in December.
Boostpoint runs local Facebook and Instagram campaigns for seasonal and holiday shifts, with the pay and the premium in the first line of the ad.
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