A Look at Unhappy Holiday Wage and Hour Issues

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.

Cutting Paid Holidays to Save Money?

The Labor Law Helpline, available for unlimited calling by Preferred and Executive members, is getting a number of calls with the following question:

Can we eliminate holiday pay to cut costs?

Answer: There is no California legal requirement to provide time off, paid or unpaid, for holidays. As such, if your company wants to terminate this benefit, you may do so. There are two issues:

1. Whether you wish to continue to close on holidays but no longer pay employees, and
2. Whether you wish to remain open on holidays and have it a regular business day.

Under option (1), keep in mind that doing so will only provide you with cost savings for your nonexempt employees because if nonexempt employees are not working for any portion of a day or an entire day, they need not be paid. This is to be distinguished from exempt employees who must be paid if they work at all in a work week and if they are ready and willing to work. If your company shuts down on its own accord and decides to make it an unpaid holiday, your exempt employees must be paid for the entire workweek.

Under option (2) you may not save money as your regular staff will likely be expected to work unless they take a personal day. Consult your own policy as to whether you require employees to use accrued time off before they take unpaid time.

In this instance, if a nonexempt employee wants to take time off for the holiday and they do not have accrued vacation or PTO, you do not have to pay them for any time they did not work. If an exempt employee takes time off for the holiday in an increment of four or more hours, you may deduct that amount of time from accrued vacation or PTO, but an exempt employee must be paid her full salary. If the exempt employee is absent for one full workday and has not yet accrued or used all accrued vacation or PTO, her salary may be reduced for that one full day.

Time off for the Holidays - what is your company doing?

Thanksgiving is on its usual Thursday this year, but Christmas Eve and New Year's Eve are on Wednesday's this year. Are you giving employees Christmas Day off, if so, how about the day after, which is a Friday. And the same for New Year's. And, are you planning on giving employees the day off with pay or without?

Remember, if exempt employees work at all in a workweek, they must be paid for the entire week. Further, if you require employees to take a vacation or PTO day, the DLSE strongly advises giving employees at least 90 days notice of this requirement.

What are employers doing?

Spanish Forms

Original posting: Friday, January 25, 2008 -- Did you know CalChamber has almost 300 forms for use by its members? From sample policies to employee notification forms and checklists, there are forms to meet many of the needs employers face.

We also have forms available in Spanish, including harassment complaint forms and make-up time requests. If you have Spanish speaking employees, check out these forms on HRCalifornia under "Forms and Checklists"!