Human Resource Blog

PTO and Holidays for Exempt Employees

I understand that if we close our office on a company recognized holiday, exempt employees must be paid for that day. Can we pay them with PTO time if we are requiring them to be off?

Your assumption is incorrect. There is no law that you must pay salaried workers for a holiday, if they perform no work on that day. Salaried workers need not be paid for a day when they perform no work at all. That’s true whether the employee misses work, or the employer closes the office on that day. Most companies that offer paid holidays to hourly workers also pay salaried workers for the same holidays…but there is no law that they must do so.  (If there is a written policy in place regarding payment for holidays, some states will enforce it.) 

Technically you could require salaried employees to use their PTO for holidays. A better option would be to offer them the choice between taking the time off without pay, or using their PTO and being paid. PTO is usually a combination of vacation, sick time, holiday pay and perhaps personal leave, so it’s absolutely appropriate to use it this way.