Human Resource Blog

holiday pay and salary workers

When we close our company for Thanksgiving and the
Friday after, we do not pay hourly employees a holiday or the day after but are we required to pay salary people for 5 days when they only work three days.

Same with Labor day comming up, due to the economy, are we alowed to not pay salary people for Labor Day? Just pay them for the four work days, as long as we give notice now?

Thank you,
An Ohio Company

No, this would be a violation of the federal law governing exempt employees, specifically the FLSA or Fair Labor Standards Act. The FLSA requires that an exempt employee be paid the same weekly salary, *regardless of the quantity or quality of work performed.* This means when the exempt employee works fewer hours in the week, he or she must still receive the entire weekly salary.

Under the FLSA, an exempt salaried employee is entitled to his or her entire weeks salary if the employee a) does any work at all during the payroll week and b) is ready, willing and able to work the entire week — even if the employer does not have a full weeks work available. You could give salaried exempt employees the entire payroll week off, and not pay them for the week — called a week of furlough. Or, you could require that exempt employees work on Labor Day, Thanksgiving and the day after Thanksgiving. But as long as you choose for them not to work on those holidays, you have to pay them for the entire week anyway.

 (Different rules apply if the employee is not ready, willing and able to work the entire week, due to illness or another reason.)

If you do not pay the exempt employees for Labor Day, you are treating them as non-exempt employees. The US Department of Labor would likely rule that the employees never were exempt, and you have been illegally trying to avoid paying overtime. In many cases, the DOL has gone back and made employers pay overtime to the salaried employees for the past 3 years.

If these employees never work overtime, you might want to consider changing their status to non-exempt. This is legal, as long as the change lasts 3 months or longer.