Paid Holidays: A Comprehensive Guide

When you’re juggling scheduling shifts, time off, overtime, and payroll compliance, it can be hard to keep track of how paid holidays work. Which holidays are paid? What are the distinctions between federal and state holidays, and how do they interact with floating holidays? 

Basically, paid holidays are days off from work where employees receive their regular pay. Employers offer these days as a benefit to attract and retain talent. Here’s the breakdown of how they work. 

What are paid holidays?

Let’s face it, managing a team means juggling a lot of responsibilities, and ensuring your employees are happy is a big one. One way is to offer a paid holiday, meaning days off from work where employees receive their regular pay. 

These holidays allow employees to take a break without losing income, providing a financial cushion during times when they might otherwise have to work. 

Employers offer paid holidays as a benefit to attract and retain talent. Many potential hires may ask you, what holidays do you get paid for? In a competitive job market, having a generous paid holiday policy can make a company more appealing to potential hires. It also helps keep current employees satisfied, reducing turnover and fostering a more stable workforce. 

Do hourly employees get paid holidays?

While the Fair Labor Standards Act (FLSA) does not require does not require payment for time not worked, such as vacations or holidays (federal or otherwise), it is typically something that employers will offer as a benefit.

How many paid holidays in a year should you offer? To keep morale high for your hourly team and add incentive when hiring, you may want to offer regular paid holidays. 

Types of holidays that are paid

Understanding the types of paid holidays can help you create a more attractive benefits package for your team. Knowing what to offer and how it fits into your company’s culture can make a big difference, and help you plan for holiday scheduling.

Federal holidays

Federal holidays are nationally recognized days off that most businesses observe. If you’re wondering what holidays do people usually get paid for, these are likely the ones that come to mine. 

Federal holidays include New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Memorial Day, Juneteenth, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas. 

On these days, employees typically receive their regular pay without needing to work. Observing federal holidays helps standardize time off across various industries and ensures that employees can celebrate significant national events and traditions. 

Company-specific holidays

Company-specific holidays are additional days off that vary by employer. These can include days like Good Friday, the day after Thanksgiving, or Christmas Eve. Employers choose these holidays based on their company culture, industry practices, or employee preferences. 

For example, a company might offer a paid day off for a local festival or a significant date relevant to the business. These holidays provide flexibility and can reflect the unique values and needs of the organization. By looking at the calendar, you can find a way to set paid holidays that aligns with your company culture.

Floating holidays

Floating holidays are paid days off that employees can use at their discretion. Unlike fixed holidays, floating holidays allow employees to choose when to take time off, accommodating personal, cultural, or religious events that may not be covered by standard holidays. 

This flexibility helps employees balance their work and personal lives more effectively. For instance, an employee might use a floating holiday to observe a religious festival, attend a family event, or simply take a personal day. Floating holidays can enhance job satisfaction by giving employees more control over their time off. 

Benefits of offering holiday pay

You’re probably wondering if the investment in paid holidays is worth it. Here’s why offering these days off can benefit both your employees and your bottom line.

Improved employee morale

Paid holidays show that you value your employees' well-being and work-life balance. When employees know they have guaranteed days off, they feel appreciated and respected. This recognition can boost their overall happiness and job satisfaction.

Offering paid holidays can also reduce burnout, as employees get the necessary breaks to recharge and spend time with their loved ones.

Increased productivity

Employees who take time off during paid holidays often return to work refreshed and recharged. This break from daily tasks allows them to relax and reset, which can lead to increased focus and efficiency when they return. A well-rested employee is more likely to be productive and less prone to errors.

Enhanced recruitment and retention

Competitive paid holiday packages can attract top talent and reduce turnover. In a competitive job market, offering a robust paid holiday policy can set your company apart from others. Potential hires often look for benefits that support their work-life balance, and paid holidays are a significant part of that equation. 

Once hired, employees are more likely to stay with a company that offers generous paid holidays, reducing the costs and disruptions associated with high turnover. This stability benefits both the employees and the organization, fostering a loyal and committed team.

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How do paid holidays work?

Getting the details right is crucial for both compliance and employee satisfaction. Here’s a quick guide on how paid holidays typically operate in most companies. 

Employers establish a paid holiday policy outlining the specific days off and eligibility requirements. This policy clearly states which holidays are recognized and who qualifies for paid time off. It ensures everyone knows what to expect and helps prevent misunderstandings. 

Eligible employees receive their regular pay for the designated holidays without needing to work. This means if you qualify, you get a day off with pay, just as if you had worked your regular hours. It's a straightforward way to ensure you can enjoy holidays without worrying about lost income. 

Sometimes employees wonder, what holidays do you get paid time and a half for? In some industries, such as retail and hospitality, employees may be required to work on holidays, because businesses often stay open during holidays to serve customers. 

To compensate, employers typically offer premium pay, which could be time-and-a-half or even double pay. This makes working on holidays more attractive and acknowledges the sacrifice of giving up personal time. 

What are the paid holidays?

Wondering which holidays employees may expect to get off? Here are the most commonly observed paid holidays in the U.S. New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas are the most widely observed paid holidays in the United States. 

These holidays are recognized by most employers, giving employees a chance to celebrate significant national events and traditions without losing pay. Many employers also offer paid time off for Martin Luther King Jr. Day, Presidents' Day, and Veterans Day. Offering these holidays as paid time off helps you show appreciation for their employees' hard work and dedication.

How many paid holidays do most companies give?

Curious about how your business’ paid holiday package stacks up? Here’s a look at what’s typical in the industry. The number of paid holidays varies by employer, but the average in the United States is around 11 days per year  after 1 year of service. This range provides a baseline for what you might expect when considering job offers or evaluating your current benefits package. 

Some companies offer more generous paid holiday packages, while others provide fewer days off. For example, tech companies and large corporations often include additional holidays to attract top talent. These might include extra days around major holidays or company-specific holidays that align with corporate culture and values. 

On the other hand, smaller businesses or those in industries with tighter margins may offer fewer paid holidays. These companies might focus on providing other benefits, such as flexible work hours or performance bonuses, to compensate for the fewer days off. Whether you’re actively hiring or evaluating your current team, consider how the number of paid holidays fits into your overall compensation package. 

Manage paying your team on holidays with Homebase

When you’re running a small business, scheduling, tracking time, and ensuring payroll runs smoothly is complex enough without factoring in paid holidays. That’s why Homebase is an all-in-one app that supports you with managing your hourly team.

From sharing your paid holiday policy with your team using our hiring and onboarding tools, to sharing updates and reminders about holidays in the team communications app, Homebase has you covered.Sign up now to make managing your team a breeze!