December 27, 2022

How to Navigate Employee Holiday Time Off

Written by
Why is TechnologyAdvice Free?
Tags: HR

With the ending of the fiscal year for many and a surge in sales for industries like retail and travel, there is a lot to do — including handling the sudden influx of requests for holiday time off. This can present a challenge for businesses that are unable to shut down on holidays, but even companies that do close must contend with an increased volume of time-off requests. 

While this can be overwhelming, instituting holiday time off best practices can help employers navigate a reduced workforce, increase employee morale, and free up time for more pressing issues. Employers should consider their business’s unique challenges and develop holiday time off policies that meet those needs while still giving employees time away from work.

How to Write a Holiday Time Off Policy

Putting a holiday time off policy in place can help employers plan for any contingency. It can also serve as a guide for both managers and employees. By following the steps below, employers can develop a detailed policy that best fits their needs.

1. Evaluate company needs

First, it’s important for businesses to self-evaluate. The following questions are a good starting point for an employer, as they consider the crucial business areas to address in the policy:

  • What holidays are the busiest for the company? 
  • Can accommodations be made to close the business during the holiday? 
  • What tasks won’t be completed because of a closure, and how can the business prepare for it? 
  • What are the expectations of customers, clients, partners, or investors? 
  • Is the company beholden to any collective bargaining agreements or service-level agreements?

In addition to self-evaluations, internal and external surveys can give businesses a 360-degree picture of what to expect at various levels of the business during a particular holiday. Clients and other external stakeholders can share their expectations for customer service, and leadership teams can communicate typical holiday workflows. 

Internally, employees can share feedback about the business’s approach to holiday operations. DEI committees and HR departments can also provide information on employee demographics and best practices for religious and cultural holiday accommodations. 

2. Create a holiday time off policy and procedure

After gathering feedback from both internal and external sources, it’s time to formalize a policy that works best for the business. A holiday time off policy should address the following:

Define company-recognized holidays and hours of operation

A company should specify the days it recognizes as holidays and how it observes holidays that fall on Saturdays or Sundays. International employers should also consider holidays observed in other countries — in some cases, businesses may be required by law to give employees in those countries the day off work. Companies that must remain open on holidays should clearly note any changes in operating hours to avoid confusion among employees, customers, and partners.

Outline fair scheduling practices

If a company must remain open on a holiday, explain how managers decide who will work, such as a system based on seniority or a rotating schedule. Employers could also have employees rank holidays by which one they are most willing to work, giving employees a degree of control over their schedules. This also gives managers more information to make better scheduling decisions.

Explain the prerequisites

If the business closes during the holiday, outline how employees become eligible for holiday pay. For example, a holiday policy could require employees to wait 90 days after they’re hired to become eligible for holiday pay. Other policies may only provide holiday pay to executives or administrative staff. Some businesses may require employees to work the day before and the day after the holiday to receive holiday pay. 

Determine how employees will be paid

Employers should define how and when both exempt and non-exempt employees will be paid. If an employee works on a holiday, the company should indicate whether they will receive additional compensation, such as a bonus or a shift differential. 

For example, companies can make it standard to pay all employees time and a half as an incentive for working during the holiday. It’s important to note, however, that non-exempt employees are legally entitled to overtime pay whether they receive special holiday pay or not.

Specify how additional time off requests are handled

Explaining the method used to determine how time-off requests are prioritized helps temper employee surprise should their requests be denied. Approving requests based on the order they were made or the seniority of the requestor are examples of policies that help align expectations for employees before they submit requests. 

Indicate how often the policy will be reviewed

As holidays around the world and business needs change, indicating a regular timeframe for reviewing the policy will ensure it remains culturally relevant and beneficial to both the employee and the employer. For instance, an annual policy review allows companies to update holiday dates and address any new staffing requirements.

Once the employer has developed a holiday time off policy, consistency is key. It is the employer’s responsibility to enforce the holiday time off policy in conjunction with their other time off policies. Deviation from the policy could leave an employer open to litigation, especially if it appears that an employer approved or denied a time off request for discriminatory reasons. 

Also read: Make Unlimited PTO More Than A Marketing Play

3. Communicate company policy to employees and external stakeholders

Policies are only effective if everyone on the team knows about them. While manual methods, like posting the new holiday policy in the company breakroom, are compliant, HR departments can simplify this process by utilizing a company-wide communication tool. Slack, for example, can instant message everyone on the team about the new policy and provide a document to review, without the need to call a meeting or print and distribute memos. 

HR departments can take this one step further by having employees formally acknowledge the policy. For instance, BambooHR’s employee self-service portal can notify employees of new policies and require an electronic signature. Companies concerned about employees adhering to new policies can utilize these acknowledgments as proof that employees are aware of all policy changes.

In addition, companies should make external stakeholders aware of holiday operating hours and communication channels. Proactively notifying partners and customers about upcoming operational changes will help align expectations and strengthen stakeholder relationships. Businesses should also update voice mailboxes and email auto-responders to include the relevant information so contacts can reach the appropriate channels for urgent assistance. 

How to Support Employees Required to Work on a Holiday

Not all companies can close for the holidays. In fact, some organizations like hospitals or assisted living communities may be legally required to stay open. While nothing can replace paid time off during a holiday, companies can maintain employee satisfaction with incentives and morale-boosting programs.

Higher compensation, such as holiday pay rates, shift differentials, or bonuses, is one method to encourage employees to work. Allowing employees to accrue an extra PTO day for working the holiday that they can then use later is another way to motivate employees to work the holiday.

Cash rewards and extra vacation/PTO days may incentivize employees to work the holiday, but they still do little to boost employee morale the day of the holiday, especially if the employee had no say in the matter. 

While keeping business needs in mind, engagement efforts like a company potluck, spirit day, lunch outing, or organized activity can increase team-building and make working on the holiday a little less irritating. Alternatively, closing early, staggering shorter shifts, or allowing employees to work from home are other examples of flexible arrangements for employees scheduled to work on holidays.  

FAQ: Holiday Time Off Laws

Holiday time-off laws vary by country, state, and locality, so employers should review common compliance questions to avoid potential fines and lawsuits.

Do I have to give employees holiday time off?

There is no U.S. federal law mandating private sector employers to provide holiday time off to employees, whether paid or unpaid. The Fair Labor Standards Act (FLSA) only requires employers to pay employees for time worked, with non-exempt employees paid at time and a half for any hours worked over 40 in a week. 

Government employees, however, are entitled to be paid for designated federal, state, or local holidays. Employers with union employees should also make sure they are granting holiday time off or holiday pay as outlined in their collective bargaining agreement.

As such, employers should have a holiday time off policy in place to address leave requirements and contract agreements for their workers. A holiday leave policy, especially a compensatory one, is also necessary for businesses to attract top talent and remain competitive within their industry. 

Moreover, employers without a holiday leave policy in place may be setting themselves up for claims of religious discrimination under Title VII of the Civil Rights Act, as individuals with religious obligations are more likely to ask for time off around specific holidays. Although employers can deny a request for time off if granting such a request presents an undue hardship, a comprehensive holiday time off policy with floating holidays can decrease the risk of such claims.

Review the U.S. Department of Labor’s Holiday Pay Guide

Does my state have any pay laws?

As of January 1, 2023, Rhode Island will remain the last state mandating private employers to pay their non-exempt employees at a premium rate if they work on holidays or Sundays. Furthermore, there are no states that require employers to offer vacation or paid time off benefits. 

However, it is worth noting that sick leave laws do vary by state and even by locality. In Los Angeles, California, for example, employees can accrue up to 48 hours of paid sick time each year for qualifying employers. Employers may want to consult local legal experts about these stipulations, as requests to use accrued sick leave may increase around the holidays. 

Finally, employers should audit their unemployment records to confirm employees properly reported any holiday pay they received. Holiday pay is considered earned income and may reduce an employee’s benefits as a result.

What should I do if I have employees outside of the U.S.?

International employers need to be cognizant of the legal requirements in countries where employees reside. Employers must ensure they are accommodating time off and holiday pay requirements appropriately based on the employee’s location. In the UK, for example, most full-time employees are entitled to 28 days of paid leave, including national holidays. 

How does FMLA impact holiday pay? 

The Wage and Hour Division (WHD) of the U.S. Department of Labor designates one week as the benchmark for determining whether a company holiday counts toward an employee’s FMLA leave entitlement. 

Generally, if an employee is off for a whole week for FMLA purposes, then the whole week, including the holiday, counts toward the employee’s leave. If an employee only takes off part of a week with a holiday for FMLA purposes, then that holiday is not considered FMLA leave. The employer should use its holiday time off policy to determine holiday pay eligibility in these cases.

For example, let’s say that Independence Day (July 4th) falls on a Thursday, and the employer’s policy is to offer paid holiday time off on that day. If an employee takes time off Sunday through Saturday of that week, then the whole week is considered FMLA leave, and the employee isn’t entitled to the paid holiday. 

However, if the employee is on intermittent FMLA leave on Sunday, Monday, and Friday of that week, then only those three days are considered FMLA leave. The employee would be entitled to holiday pay for Independence Day on that Thursday.

FMLA becomes more complicated with the intersection of an employer’s paid leave policies, the employees’ particular circumstances, and how companies dictate paid leave usage during the designation phase of the FMLA. A good rule of thumb is for employers to review their policies and enforce them consistently among all of their employees in the same situation.

Also read: Leave Management Tools and Best Practices

Business Impact of Holiday Time Off

Allowing employees to step away from work and be with family and friends on a holiday helps employers attract and retain top talent and strengthen company culture. Even for companies in industries that complicate holiday closures, incentives such as premium holiday pay, bonuses, or company parties can encourage employees to work a holiday and make the experience more pleasant.

By developing clear policies and procedures around holiday time off, employers can provide employees with realistic expectations of their duties during the holiday. Managers and HR staff can use this roadmap to treat requests for time off around a holiday in a fair and impartial way. These processes will also help ensure employers are maintaining compliance with relevant laws.

Holidays are often stressful times for businesses in a range of industries, and a surge in time off requests can be difficult to juggle with other priorities. Check out our lists of comprehensive HRIS, time and attendance, and employee scheduling software solutions that can help process holiday time off requests in accordance with company policies.

Featured Partners: Time Clock Software


Visit website

Our goal is to provide an employee time clock software that is simple and easy to use. Our unique graphical employee time cards will cut your editing time in half when compared to other time clock systems.

TimeTrakGO’s unique web-based time clock software will not only save you time and money each week, but our easy-to-understand user interface (UI) will also get you and your team up and running in just minutes.

Learn more about TimeTrakGO


Visit website

Homebase is a free time clock that packs a punch. You can track hours and run payroll effortlessly. Confirm your team’s location with GPS and geo-fencing. Minimize time theft and control labor costs. Join for free!

Learn more about homebase

TechnologyAdvice is able to offer our services for free because some vendors may pay us for web traffic or other sales opportunities. Our mission is to help technology buyers make better purchasing decisions, so we provide you with information for all vendors — even those that don't pay us.
In this article...