It is that time of year again when clubs, like many businesses, move to holiday schedules. As always, it is important to determine the proper pay for employees during holiday periods. Keeping up with the developing wage and hour laws is difficult. With both state and federal statutes to follow, private employers must be vigilant in their efforts to remain in compliance with an ever-expanding set of specific and complicated laws.
Fortunately for clubs, one element of the wage and hour law that remains unregulated by state and federal authorities involves holiday pay. Often, holiday pay is governed by a club’s internal policy. While many employers choose to close their doors on particular holidays, there is nothing in state or federal law requiring private sector employers to pay their employees for this time off. Additionally, there are no laws requiring employers to pay their employees differently if work is performed on a holiday.
The Federal Fair Labor Standards Act (FLSA) and State Agencies
The FLSA provides strict guidelines concerning matters of minimum pay, hours worked and other basic employment conditions. The FLSA does not, however, treat holidays differently from typical workdays. If an employer chooses to require its employees to work on the Fourth of July, or Christmas, it can do so without having to pay employees any differently than if the employee worked on a non-holiday workday.
Similarly, state agencies like California’s Division of Labor Standards Enforcement (DLSE) and Industrial Welfare Commission (IWC) treat holidays like any other day of the week. Holidays receive no special treatment. Clubs must, of course, abide by normal overtime and meal-and-rest regulations on holiday workdays.
Internal Club Policies
Clubs must, however, remain consistent with their own internal policies. Most employers have internal policies regarding holiday pay. While holiday pay is not directly policed by federal or state agencies, the terms and conditions of an employer’s internal policy may be enforced against the employer. Courts look to employee handbooks, manuals and other written policies as agreements and “promises” between the employer and the employee, and require employers abide by their promises. If an employer has an internal policy of providing overtime pay for work performed on holidays, it must abide by that policy. Failure to do so could result in a claim by the employee to enforce the terms of the policy.
Keep in mind that in a unionized workplace, the requirements of a collective bargaining agreement may create special rules for holiday pay and premiums for pay when an employee works a designated holiday. If your club has a labor agreement regulating these issues, it is important to stay in compliance with the agreement as a matter of complying with the applicable wage and hour laws.
Clubs should also monitor holiday pay issues for exempt employees. For example, if a policy requires an employee to complete an “introductory period” before becoming eligible for paid holidays, and a holiday falls during the exempt employee’s introductory period, the exempt employee must be paid their entire salary for the work week if they performed any work even if they did not work on that holiday.
A hot topic for wage and hour law, as well as tax and other areas of law, is independent contractor status. If an employee is mischaracterized as an independent contractor, there may be wage and hour liabilities where an employee is denied holiday pay under terms where holiday pay is made available to persons the employer provides to other employees.
Thomas A. Lenz, Paul M. Huston, and Paul S. Fleck are with the firm of Atkinson, Andelson, Loya, Ruud & Romo in Cerritos, California. They can be reached via their website at www.aalrr.com.