Ques­tion:   Our hand­book states you must work your first sched­uled day before AND after the hol­i­day to receive hol­i­day pay.  How­ev­er, what if the employ­ee is sched­uled to work the hol­i­day and then calls out on the hol­i­day?  Do we still need to pay them hol­i­day pay even though they called out?

Answer: There is noth­ing in the wage and hour laws (fed­er­al or state) that even requires employ­ers to pay hol­i­day pay. The employer’s pol­i­cy and past prac­tice gov­ern the pay­ment of hol­i­day pay com­plete­ly in the case of nonex­empt employ­ees. With exempt employ­ees, employ­ers need to con­sid­er the salary basis issue for the exemp­tion that requires that exempt employ­ees are paid full salary for the week in which they work.

So for your nonexempt/hourly employ­ees, if your hand­book states that you must work your first sched­uled day before and after the hol­i­day to receive hol­i­day pay and the employ­ee does not work those days, then no hol­i­day pay is owed them, as long as you con­sis­tent­ly apply this prac­tice to all employ­ees in the same clas­si­fi­ca­tion (so as to avoid dis­crim­i­na­tion complaints).

In the case of exempt employ­ees, the salary basis test applies. As a gen­er­al rule, if the exempt employ­ee per­forms any work dur­ing the work­week, s/he must be paid the full salary amount (regard­less of the num­ber of days or hours worked). Deduc­tions from pay are allowed in only a few sit­u­a­tions. In your case, you would be allowed to NOT pay the exempt employ­ee for the hol­i­day if the employ­ee was absent for one or more full days for per­son­al rea­sons oth­er than sick­ness or dis­abil­i­ty (you can sub­sti­tute accrued vaca­tion pay for that time off to keep the pay­check “whole” or just deduct the full days missed). If the exempt employ­ee called in sick, then you can­not deduct the salary for the week, but you can sub­sti­tute accrued sick leave hours for that time off.

Orig­i­nal­ly post­ed thinkhr.com