Human Resource Blog

Where HR Professionals Seek Answers

A Practical Source For Your Daily HR Needs.Lets Build An HR Blog Community Together! Want To Share Your HR Knowledge Or Gain Knowledge Through Other Professionals?Lets Discuss HR!


Holiday pay for exempt employees

If an exempt employee has paid time off benefits to cover sick, vacation and holidays, but has exhausted all available PTO time when a holiday occurs, can that holiday be docked or is the employer still obligated to pay the exempt employee for that day? According to FLSA, a sick day could be docked.

You are correct that FLSA would permit the employer to dock the exempt employees wages, if the employee missed work because he or she was sick. But the employee is not taking a sick day, so that regulation is totally irrelevant.

Under FLSA, an exempt employee who is ready, willing and able to work the entire week, and works any portion of the week, must be paid his or her entire weekly salary. If the business is closed on a holiday, there is no work for the exempt employee to do. The employer must pay the employee for this time off (again, assuming that at some point during that payroll week the employee did work.)

If the exempt employee has no vacation or PTO time left, one option would be for the employer to require that the exempt employee work that day. If there are no hourly employees to supervise, the employer could require the exempt employee to reorganize the filing system, mop the floor, clear out the store room, or whatever. There is no law that the employer must give an exempt employee the day off, on a holiday. However, if the employer chooses to give the exempt employee the day off, the employer must still pay the exempt employees full weekly salary.

Many companies have a rule that employees (or exempt employees) cannot let their PTO balance go below a certain level, to prevent this problem.

Tags: , ,

This entry was posted on Wednesday, August 19th, 2009 at 12:38 pm and is filed under
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.

17 Responses to “Holiday pay for exempt employees”

  1. Lorna Lenz Says:

    How about a situation where the company has a rule that says all employees must work the full day before and after a holiday. Can the company dock pay of an exempt level employee if they are late by 30 minutes late?

  2. Caitlin Says:

    Hi Lorna! No, an exempt employee who is ready, willing and able to work every work day during the week, must be paid his or her full weekly salary. The employee can be disciplined or terminated for being tardy, but must be paid the full weekly salary. HTH, and thanks for reading the blogs!~ Caitlin

  3. Jeanine Says:

    Can an employer make an exempt employee use PTO on a holiday that falls during the work week. I was told that PTO should only be used for personal time off leave, not mandated holiday time off.

  4. Caitlin Says:

    Hi Jeanine! This is a matter of company policy, rather than labor law. Yes, an employer can require an exempt employee to use PTO for a holiday that falls within the week, and many do. There is no law that PTO must be used at your discreation only. HTH, and thanks for reading the blogs!~Caitlin

  5. Nancy Says:

    what do you do when you have a company that has a policy in place that states if expempt employees work any undefined period of time, they do not have to use their PTO. But you have a holiday during the week and you work for a few hours on that day because the company is mandating payroll to be done on the holiday and you dont take PTO because you worked, and you get written up because they told you to take PTO even though you worked (PTO can only be used in 8 hour increments at this company)

  6. Caitlin Says:

    Hi Nancy! This is not entirely fair to the employee, but it is legal and the employee has no recourse. By law, an exempt employee who works any portion of the day must be paid for the whole day. However, the company can count that as PTO if they like. The law does not specify how the exempt employees salary will be tabulated — only that the amount on the check must be right.
    Any employee who defies a direct order is insubordinate, and can expect to be disciplined or terminated.
    There are many advantages to being an exempt employee, but there are also many disadvantages. One of the disadvantages is having to work unpaid overtime, or having to work on holidays for no extra pay.
    If the supervisor specifically violated a written company policy, you can certainly present your case, tactfully and respectfully, to HR or upper management. Otherwise, to coin a phrase, life is not always fair. HTH, and thanks for reading the blogs!~ Caitlin

  7. Henry Says:

    How about a situation like this. 1) Exempt employee usually works a 12 hour shift. Company policy pays 8 hours holiday. Business is closed on holiday. Employee gets 8 hours holiday pay & is told that they have to make up the other 4 hours either on another day or at another company location. Legal or not.

    Other scenario ..2) employee works 12 hours on holiday get paid regular week salary, but only 8 hours holiday pay. (previous policy would Pay regular & 12 hour holiday). Legal or not ?


  8. Caitlin Says:

    Hi Henry! Under the FLSA, as long as the exempt employee is paid his usual salary for the week, either of these is legal.
    1) Yes, this is legal. An employer can establish any standard they like for the number of hours worked by an exempt employee. The employer could require that the employee work 24 hours on the holiday and make up 24 hours during the week. (That is not a typo.)

    2) Again, yes. The exempt employee is only entitled to his usual salary for the week. It can all be holiday pay, or none of it can be holiday pay. This is all legal, as long as the exempt employee is paid for the week. (Assuming he is available to work the entire week, including the holiday.) HTH, and thanks for reading the blogs!~ Caitlin

  9. Henry Says:

    Thanks for the response.

    Please look at this again.
    Business is CLOSED on holiday (usually a 12 hour shift) They Are paying regular weeks salary. They are
    crediting 8 hours towards holiday pay & employee must make up difference of 4 hours..
    If law requires them to pay full week, then why should employee be forced to make up the 4 hours..

    Here is another question.
    Same employee classified as exempt, however if employee work over base hours he/she does get paid over base salary at hourly rate..
    Employee is mandated to attend a meeting on day off for 3 hours or so, several times a year.Company does not pay for attending meeting . Or if meeting is held on day employee is working, company will find coverage for meeting time & employee is required to make up that time..

    What does FLSA say about that ?

  10. Caitlin Says:

    Hi again Henry! Basically what the FLSA says is that the employer sets the work schedule for an exempt employee. As long as the employee is paid his or her usual salary for the week, the employer can require that the employee work 80 hours or 100 hours per week. Or, as in your case, the employer can require that the employee work 4 extra hours during a week in which the employee has a day off for a paid holiday, without any extra pay. Is this fair? No, it is not. But it is legal under FLSA.

    You ask “If the law requires them to pay the full week, why should they be required to make up the hours?” The two issues are completely unrelated under FLSA. The exempt employee is entitled to his or her weekly salary, but can be required to work any schedule the employer determines. (If the employee refused to work the extra 4 hours, he would still be entitled to his full salary. However, the employer could terminate him for not working the expected hours, a performance issue.)

    The second situation may contain the loophole you are desperately looking for. Generally speaking, an employee whose wages vary based upon the number of hours worked is not exempt under FLSA. So if the employee is being paid $x for each hour of overtime worked, that alone would make him a non-exempt salaried employee. Some employers try to avoid this by calling the extra pay a bonus, however the practice is dubious and may not stand up in court. You should file a wage complaint with the U.S. Department of Labor at about unpaid overtime for the meetings, stating that you are non-exempt due to this practice of paying more when you work “overtime.”

    If the employer did not pay extra for overtime, they would not be required to pay anything extra for the 3-hour mandatory meetings. They are covered in the exempt employees salary. Basically, the concept of hours worked, or extra pay for hours worked, is irrelevant when speaking of an exempt employee. HTH, and thanks for reading the blogs!~ Caitlin

  11. Scott Says:

    Caitlin – great blog! How about this scenario? Company policy states that employees begin accruing PTO (including holidays) immediately but cannot use it during 1st 90 days. Non-exempt employees who are under 90 days are permitted to work additional hours to avoid (or mitigate) reduced pay during holiday weeks, but an exempt employee who is ready, willing, able (and actually does) work holidays and/or extra hours during holiday weeks is docked during 1st 90 days. Paycheck reflects annual salary broken down as a per hour amount, with 32 hours instead of 40 paid.

    Again, although not technically required by the employer, the employee works on the holiday to keep up with workflow.

    You mention several times that exempt employees are correctly paid their usual salary if they work any part of the workweek, and that is always how I understood the law as well, but I am having difficulty finding any documentation that specifically addresses this situation. Company position is that the exempt employee is not entitled to holiday pay and therefore only eligible for a portion of salary. Correct?

  12. Caitlin Says:

    Hi Scott! You are right, of course. These exempt employees who are ready, willing and able to work on the holiday (and in some cases are working on the holiday) are entitled to their full salary for the week.

    The employer does not have to consider this “holiday pay” but they do have to pay the exempt employee for the entire week.

    By not paying the employees for the week, the employer is treating them as non-exempt employees, and they may be are entitled to overtime.

    More documentation is available at the link below. If the employer still refuses to pay exempt employees for the week, our recommendation is that you file a wage complaint with the U.S. Department of Labor at It is illegal for an employer to retaliate against an employee who files a wage complaint in good faith. HTH, and thanks for reading the blogs!~ Caitlin

    Read more about the salary requirement at:

  13. Marlene Says:

    I have been hearing about case law recently that basically supports NOT charging PTO banks for partial days taken for Salary Exempt staff. Have you heard of anything like this?

  14. Caitlin Says:

    Hi Marlene! There have been such cases in a few jurisdictions such as California. However, in response the California DLSE recently issued an opinion letter supporting this practice. If you have a doubt about the jurisdiction you are in, consult an attorney. HTH, and thanks for reading the blogs!~ Caitlin

  15. Diane Says:

    I have an exepmt employee that is still in her 90 days probation. We had a holiday and docked her for those 8 hours since she is still in probation she does not get any benefits is this wrong?

  16. bulldog Says:

    I have an exepmt employee that is still in her 90 days probation. We had a holiday and docked her for those 8 hours since she is still in probation she does not get any benefits is this wrong?

  17. hrlady Says:

    Hi Bulldog,

    In regard to your question for an exempt employee, you cannot reduce the predetermined salary even during a probation period. If the exempt employee is ready, willing and able to work, deductions from the exempt employee’s pay may not be made when no work is available (you company closed for the holiday). You may reduce a non-exempt or hourly employee pay in a probation period.

    Additional information on holidays is that two states, Massachusetts and Rhode Island require employers to provide employees with some sort of holiday leave benefit. The other 48 states do not require employers to provide for any type holiday benefits.

    Thank you for reading the

Leave a Reply

  • [ Back ]
  • WP-SpamFree by Pole Position Marketing

Home Ask a Question Archives

© 2008, All Rights Reserved