The holidays bring with them tricky wage and hour issues. Are you required to pay employees for holidays? What are your obligations for paying employees if you close your establishment during the holidays?
Although there is no California law that requires you to provide time off, paid or unpaid, for holidays, you must pay exempt employees for the entire week if they work at all in a work week and if they are ready and willing to work. You need not pay nonexempt employees for any day they do not work.
If you close for part of a week, you may not require exempt employees to use their vacation time for the shutdown. If you're considering whether to require employees to use accrued vacation during a week-long shutdown, such as between Christmas and New Year's, be careful. It's possible your practice could lead to claims of discrimination.
For example, if you shutdown during the Christmas holiday and require employees to use a full week of vacation, employees who don't celebrate Christian holidays and are nevertheless required to use their accrued vacation time could claim the policy is discriminatory.
However, if you accommodate those employees' requests to celebrate other religious holidays, you might help avoid a successful discrimination lawsuit. Nevertheless, it's a good idea to make holiday vacation use optional whenever possible.
Read HRCalifornia's article, Paying for the Holidays, for more information on wage and hour issues during the holidays.