Federal Holidays and How They Are Paid

What Is a Federal Holiday?

A federal holiday is a legal public holiday recognized by the United States government. Most federal agencies close, and eligible federal employees are generally excused from work without losing their basic pay.

Federal law currently recognizes 11 nationwide federal holidays:

• New Year’s Day January 1
• Birthday of Martin Luther King, Jr. the third Monday in January
• Washington’s Birthday the third Monday in February
• Memorial Day the last Monday in May
• Juneteenth National Independence Day June 19
• Independence Day July 4
• Labor Day the first Monday in September
• Columbus Day the second Monday in October
• Veterans Day November 11
• Thanksgiving Day the fourth Thursday in November
• Christmas Day December 25

The official federal name for the February holiday is Washington’s Birthday, although many calendars and employers call it Presidents Day. Similarly, some states and organizations observe Indigenous Peoples’ Day on or around the federal Columbus Day holiday, but the federal statutory name remains Columbus Day.

Inauguration Day is also treated as a holiday for certain federal employees in the Washington, D.C., metropolitan area every four years following a presidential election. It is not an additional nationwide holiday for all federal employees.

Are Federal Holidays Automatically Paid?

For eligible federal employees, federal holidays are generally paid. For private-sector employees, federal law usually does not require paid holidays.

The Fair Labor Standards Act, or FLSA, establishes rules covering minimum wage, overtime, recordkeeping, and child labor. It does not require private employers to provide paid time off for federal holidays. It also does not require employers to close or pay a premium merely because someone works on Thanksgiving, Christmas, or another federal holiday.

Private holiday benefits generally come from one or more of the following:

• A written company policy or employee handbook
• An employment agreement
• A collective bargaining agreement
• An established company practice
• A state or local wage law

In other words, the federal government names the holiday, but your employer’s policy usually decides what happens to your private-sector paycheck.

How Federal Employees Are Paid for Federal Holidays

Federal Employees Who Do Not Work

A full-time federal employee who is excused from a regularly scheduled workday because of a holiday generally receives basic pay for the scheduled holiday hours. The employee is not normally required to use annual leave or other paid time off.

For an employee working a traditional Monday-through-Friday schedule, this often means receiving eight hours of basic pay while enjoying a day away from the office. The paycheck should look much like it would have if the employee had worked a normal day.

Federal Employees Required to Work

Covered federal employees who are required to perform nonovertime work during their regularly scheduled tour on a holiday generally receive:

• Their regular basic pay for the hours worked; and
• Holiday premium pay equal to their basic rate for those hours.

That produces total compensation equal to approximately 200% of the employee’s basic hourly rate for covered holiday hours. In everyday payroll language, that is commonly described as double pay.

For example, a covered federal employee with a basic rate of $30 per hour who performs eight qualifying hours of holiday work would generally receive $240 in basic pay plus $240 in holiday premium pay, for a total of $480.

Special rules, exclusions, premium-pay caps, work schedules, and agency-specific statutes can affect the calculation. Holiday premium pay usually applies only to nonovertime hours within the regularly scheduled holiday tour. Hours beyond that tour may be handled under applicable overtime rules instead.

When a Holiday Falls on a Weekend

The actual calendar date and the federally observed date may be different. When a federal holiday falls on Saturday, it is commonly observed by Monday-through-Friday federal offices on the preceding Friday. When it falls on Sunday, it is commonly observed on the following Monday.

Full-time federal employees with nontraditional schedules may receive an “in lieu of” holiday when the legal holiday falls on a nonworkday. The precise day is determined under federal scheduling rules rather than by employee preference. Part-time and intermittent federal employees generally do not receive an in-lieu holiday simply because the holiday falls on a day they were not scheduled to work.

Compressed and Flexible Work Schedules

Holiday benefits can look different for employees working four 10-hour days, flexible schedules, rotating tours, or other alternative arrangements. An employee on a compressed schedule may receive holiday pay based on the number of hours regularly scheduled for that holiday, while employees on certain flexible schedules are generally excused for eight hours.

This is why two federal employees in the same office can have different holiday-hour entries without either payroll department having lost its calculator.

How Private-Sector Holiday Pay Works

Private employers have considerable flexibility under federal law. A company may recognize all 11 federal holidays, recognize only six, substitute floating holidays, or remain open every day of the year.

Common private-sector arrangements include:

• A paid day off at the employee’s regular rate
• Regular pay for employees who work
• Time-and-a-half for holiday work
• Double time for holiday work
• Regular wages plus a separate paid holiday benefit
• A floating holiday that can be used on another date
• No holiday pay for certain part-time, temporary, or seasonal workers

Paid holidays are nevertheless common. Bureau of Labor Statistics data for March 2025 showed that 81% of private-industry workers had access to paid holidays, with an average of eight paid holidays per year. Access varied by occupation, employer size, wage level, and other workforce characteristics.

Full-Time and Part-Time Employees

An employer may provide paid holidays only to full-time employees, prorate holiday hours for part-time workers, or extend the same benefit to everyone. Federal law does not generally require a private employer to give part-time employees the same holiday benefits offered to full-time employees.

However, the written policy should be applied consistently. A policy that promises four hours of holiday pay to eligible part-time employees should not mysteriously become invisible when payroll week arrives.

Eligibility and Attendance Rules

Some employers require employees to complete a waiting period before receiving paid holidays. Others require employees to work their scheduled shifts immediately before and after the holiday unless an absence was approved.

These rules should be stated clearly. Employers should define how approved vacation, sick leave, protected leave, jury duty, weather closures, shift swaps, and unscheduled absences affect holiday eligibility.

Does Working on a Federal Holiday Mean Time-and-a-Half?

Not automatically.

Under federal law, a nonexempt private-sector employee is generally entitled to overtime when the employee works more than 40 hours in a defined workweek. Working on a holiday does not, by itself, create an overtime entitlement.

An employee could work eight hours on Christmas Day and receive only the ordinary hourly rate if:

• The employee remains below 40 hours worked for the week;
• No state law requires premium pay; and
• No employer policy, contract, or union agreement promises extra compensation.

The calendar may be wearing a Santa hat, but the FLSA is still counting hours worked.

Does Paid Holiday Time Count Toward Overtime?

Under the FLSA, overtime is generally calculated from hours actually worked. Paid holiday hours during which an employee performs no work ordinarily do not have to be counted as hours worked.

Example 1: Holiday Pay Does Not Create Overtime

Maria earns $20 per hour. She works eight hours on Tuesday, Wednesday, Thursday, and Friday, for 32 hours actually worked. Her employer also pays eight hours for Monday’s holiday.

Maria receives 40 hours of straight-time compensation, totaling $800. She does not receive federal overtime because she worked only 32 hours.

Example 2: Forty Worked Hours Plus a Paid Holiday

Jordan works 40 hours from Tuesday through Saturday and also receives eight hours of paid holiday time for Monday. Jordan may receive compensation for 48 hours, but only 40 were actually worked. Federal law does not require overtime solely because the paycheck contains 48 compensated hours.

Example 3: Forty-Eight Hours Actually Worked

Devin works 48 actual hours during the workweek, including eight hours on a holiday. Unless an exemption applies, Devin is generally owed overtime for eight hours.

If the employer already pays a qualifying holiday premium of at least one-and-a-half times the normal rate, federal regulations may allow the premium portion to be excluded from the regular-rate calculation and credited toward required overtime compensation. Payroll must perform the calculation correctly rather than casually stacking every premium like pancakes at a breakfast buffet.

What About Salaried Employees?

Salaried Exempt Employees

A properly classified salaried exempt employee generally must receive the full predetermined salary for any workweek in which the employee performs work, subject to limited lawful deductions.

If the business closes for one holiday but the exempt employee performs work during the rest of that week, the employer generally cannot reduce the employee’s salary because no work was available on the holiday. The employer may, in some circumstances, reduce an accrued leave balance while still paying the full salary.

This does not mean an exempt employee is entitled to additional compensation for working on the holiday. The fixed salary may cover the holiday work unless the employer offers a bonus, premium, compensatory day, or other benefit.

Salaried Nonexempt Employees

Receiving a salary does not automatically make an employee exempt from overtime. A salaried nonexempt employee remains entitled to overtime under the applicable wage rules. Employers must determine the regular rate and overtime compensation using the employee’s salary arrangement and actual hours worked.

State Laws May Change the Result

Although federal law does not ordinarily require private-sector holiday premiums, state laws can provide greater protection.

Rhode Island, for example, generally requires covered employees who work on specified Sundays and legal holidays to receive at least one-and-a-half times their normal rate, although numerous statutory exemptions may apply. Employers operating there must review the covered holidays, industry exclusions, and current regulations rather than relying solely on federal rules.

Massachusetts previously required premium pay for certain retail employees working on Sundays and designated holidays, but that premium-pay requirement was phased out and ended January 1, 2023. Other Massachusetts blue-law and workplace requirements may still affect whether particular businesses can open and whether employees can be required to work.

Local ordinances, industry-specific rules, government contracts, and collective bargaining agreements may create additional obligations. Multi-state employers should avoid assuming that one national handbook sentence works perfectly in every jurisdiction.

Federal Holidays and Religious Observances

Federal holidays and religious accommodations are separate issues. A religious observance does not need to be a federal holiday before an employee can request a workplace accommodation.

Title VII may require a covered employer to reasonably accommodate an employee’s sincerely held religious belief or practice unless the accommodation would create an undue hardship. Possible accommodations include flexible scheduling, voluntary shift swaps, schedule changes, or use of available leave.

This does not necessarily create a right to paid time off. It means employers should evaluate accommodation requests fairly rather than assuming that only Christmas or another company-recognized holiday counts as a legitimate observance.

Questions Every Holiday Pay Policy Should Answer

For Employers

• Which holidays does the company recognize?
• Which employees are eligible for paid holidays?
• How are benefits prorated for part-time employees?
• What happens when a holiday falls on a weekend?
• What premium applies when an employee works?
• Does the employee receive holiday pay in addition to wages for working?
• Do paid holiday hours count toward company overtime, even when federal law does not require it?
• What attendance rules apply before and after the holiday?
• How are overnight and rotating shifts handled?
• Which state or local laws apply to remote employees?

For Employees

Employees should read the handbook, offer letter, union contract, and recent payroll notices. Useful questions include:

• Am I eligible for paid holidays yet?
• Will I receive holiday pay if the holiday is not one of my scheduled workdays?
• What rate applies if I work?
• Must I work the day before or after the holiday?
• Will the holiday reduce my PTO balance?
• Does the company use the actual holiday or an observed date?

Getting answers before the shift is much more relaxing than investigating a payroll mystery while eating leftovers.

Common Myths About Federal Holiday Pay

Myth: Every Business Must Close

Federal holidays primarily govern federal operations. Private businesses can usually remain open.

Myth: Everyone Who Works Gets Double Pay

Double pay may be offered by policy or required under a specific rule, but it is not a general FLSA requirement for private employers.

Myth: Eight Hours of Holiday Pay Counts as Eight Hours Worked

Paid time off is generally not treated as hours worked when determining federal overtime.

Myth: Salaried Employees Cannot Lose Pay for Any Holiday

The answer depends on whether the employee is exempt, whether work was performed during the week, why the absence occurred, and whether a lawful deduction applies.

Myth: Calling a Day a Federal Holiday Controls Every Payroll Rule

The label alone does not answer questions about eligibility, premium rates, overtime, attendance requirements, or state-law exceptions.

Workplace Experiences: What Holiday Pay Looks Like in Real Life

The following composite experiences reflect common holiday-pay situations. They are not stories about one identifiable employer or employee, but they show why a clear policy matters.

The New Employee Who Expected a Paid Day Off

A newly hired warehouse associate sees “Labor Day Closed” on the company calendar and assumes the day will be paid. When the paycheck arrives, it is eight hours lighter. The handbook explains that holiday benefits begin after 90 days of employment.

The policy may be lawful, but the employee’s frustration is understandable. The date was labeled as a company holiday, yet eligibility was buried several pages away. A better onboarding process would explain waiting periods before the first holiday arrives. No one enjoys learning payroll policy through a smaller bank balance.

The Nurse Working While Everyone Else Is Barbecuing

A hospital nurse works a 12-hour Independence Day shift. The hospital pays time-and-a-half for all holiday hours under its compensation policy. Because the nurse also crosses 40 worked hours during the week, payroll reviews whether the holiday premium satisfies part of the overtime obligation or whether additional overtime remains due.

The experience illustrates an important point: premium holiday pay and statutory overtime are related but not identical. Employees often see several lines on the pay stubregular hours, holiday premium, shift differential, and overtime adjustment. A complicated pay stub is not necessarily wrong, but the numbers should be explainable.

The Office Employee With 48 Paid Hours but No Overtime

An hourly office employee receives eight paid hours for Thanksgiving and works four 10-hour days afterward. The employee sees 48 compensated hours and expects eight overtime hours.

Under the employer’s policy and federal overtime rules, the employee has only 40 hours actually worked. The eight Thanksgiving hours are a paid benefit, not working time. The paycheck contains 48 straight-time hours and no overtime premium.

This is one of the most common holiday payroll surprises. The easiest solution is to explain the distinction between “hours paid” and “hours worked” directly on timekeeping instructions.

The Remote Employee in Another State

A company headquartered in Texas hires a remote employee living in Rhode Island. Managers continue using the company’s national policy, which provides ordinary pay for holiday work. The remote employee asks whether state holiday-premium rules apply.

The answer may depend on the employee’s actual work location, the holiday involved, and whether an exemption covers the business or occupation. The employer must review the law of the jurisdiction where the employee works rather than relying only on headquarters policy. Remote work may have eliminated the commute, but it certainly did not eliminate state wage laws.

The Federal Employee on a Four-Day Schedule

A federal employee normally works four 10-hour days. A holiday falls on one of those regularly scheduled days, while a colleague on a flexible schedule receives eight holiday hours. At first, the entries appear inconsistent.

The difference comes from alternative work-schedule rules. Holiday entitlement may depend on whether the employee is on a compressed or flexible schedule and how many hours were regularly scheduled. The experience demonstrates why employees should compare their timecards with the governing schedule rules, not simply with the coworker at the next desk.

The Most Valuable Lesson

Across these situations, the recurring problem is rarely the existence of a holiday. It is uncertainty about eligibility, hours worked, premium rates, state law, and observed dates. Clear written policies and readable pay statements prevent most disputes. When the rules are vague, even a cheerful holiday can produce the least festive tradition of all: an email chain involving payroll, HR, three managers, and someone replying to everyone.

Conclusion

Federal holidays provide paid time off and special pay protections for many federal employees, but they do not create a universal holiday-pay rule for the American workforce. Private employers are generally free under federal law to choose which holidays they recognize and whether they provide paid leave or premium wages, subject to state laws, contracts, collective bargaining agreements, and their own published policies.

Employees should focus on four questions: Was the time actually worked? What does the employer’s written policy promise? Does state or local law add protection? Is the employee exempt or nonexempt? Once those questions are answered, holiday pay becomes far less mysteriousand payroll can return to being merely complicated rather than supernatural.