Small employers usually meet this question in November: Thanksgiving is coming, someone asks whether they'll be paid for it, and nobody remembers promising anything. This post covers what US federal law requires for holidays (very little), the two places it still matters (overtime and salaried staff), where state law can add rules, and how to write a policy that answers the question before it's asked.
Is holiday pay required by federal law?
No. The Department of Labor says the Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays, federal or otherwise. Paid holidays are generally a matter of agreement between the employer and the employee or the employee's representative.
The same goes for working on a holiday. The FLSA requires at least the federal minimum wage for all hours worked and time and a half for hours over 40 in a workweek. It doesn't treat a holiday differently from any other day, so an hour worked on Thanksgiving is an ordinary hour unless your policy, a contract or state law says otherwise.
The federal exception is government contracts. Work under the McNamara-O'Hara Service Contract Act or the Davis-Bacon and Related Acts can carry holiday pay requirements set in the contract's wage determination. The DOL notes these apply to covered contracts over $2,500 and to specific worker classifications.
Federal holidays in 2026 and 2027
Federal holidays are the days federal offices close. A private employer doesn't have to close or pay for them, but most paid holiday policies start from this list. When a holiday falls on a weekend, the Office of Personnel Management (OPM) moves the federal day off to the nearest weekday, and many employers do the same.
| Holiday | 2026 | 2027 |
|---|---|---|
| New Year's Day | Thursday, January 1 | Friday, January 1 |
| Birthday of Martin Luther King, Jr. | Monday, January 19 | Monday, January 18 |
| Washington's Birthday | Monday, February 16 | Monday, February 15 |
| Memorial Day | Monday, May 25 | Monday, May 31 |
| Juneteenth National Independence Day | Friday, June 19 | Friday, June 18 |
| Independence Day | Friday, July 3 | Monday, July 5 |
| Labor Day | Monday, September 7 | Monday, September 6 |
| Columbus Day | Monday, October 12 | Monday, October 11 |
| Veterans Day | Wednesday, November 11 | Thursday, November 11 |
| Thanksgiving Day | Thursday, November 26 | Thursday, November 25 |
| Christmas Day | Friday, December 25 | Friday, December 24 |
Do paid holidays count toward overtime?
No. Overtime under the FLSA is owed for hours actually worked over 40 in a workweek, and the DOL says payments for occasional periods when no work is performed, such as vacation, holidays or illness, are not part of the regular rate. So a paid holiday doesn't push an hourly employee into overtime.
| Week | Hours worked | Holiday hours paid | Overtime hours owed under the FLSA |
|---|---|---|---|
| Monday holiday, worked Tuesday to Friday, 8 hours a day | 32 | 8 | 0 |
| Monday holiday, worked Tuesday to Saturday, 9 hours a day | 45 | 8 | 5 |
If you do pay extra for working on a holiday, it can count in your favour. The DOL says premium pay for work on Saturdays, Sundays or holidays can be left out of the regular rate if the premium is at least one and a half times the rate for like work on other days, and that it can be credited toward overtime owed. Holiday gifts that aren't tied to hours or output can also be left out of the regular rate.
Can you dock a salaried employee for a holiday closure?
No, not an exempt one. Under the DOL's salary basis rule, an exempt employee must receive the full salary for any week in which they do any work. If the employee is ready, willing and able to work, you can't deduct pay because you closed for a holiday and there was no work to do. Making such deductions as a practice can cost you the exemption, and with it the right not to pay overtime.
For hourly staff the rule is simpler: if they don't work the holiday and your policy doesn't pay it, the hours aren't paid. Write that down, so it isn't a surprise.
Where state law can require holiday pay
States can go further than the FLSA, and a few do for holiday work. Rhode Island is the clearest example: its Department of Labor and Training says employees must be paid at least time and a half for work on Sundays and holidays, with exceptions for some sectors such as health care and hospitality, and it extracts holiday hours first when working out retail overtime.
| Question | Federal rule (FLSA) | Check your state for |
|---|---|---|
| Paid day off on a holiday | Not required | Rules for public employees, contracts or specific industries |
| Extra pay for working a holiday | Not required | Sunday and holiday premium laws, such as Rhode Island's |
| Holiday hours counted toward overtime | No, hours worked only | Daily overtime or premium-hour rules |
| Promised holiday pay in a written policy | A matter of agreement | How unpaid promised pay is treated under wage payment laws |
Your state labor department's website is the place to check. Our guide to pay stub requirements by state cites each state's official source, which is a useful starting point.
How to set a holiday pay policy
- Pick the paid holidays. Start from the federal list and choose which days you close or pay for.
- Say who qualifies: all staff, full-time only, or after a waiting period.
- Say what a paid holiday is worth: a normal day's hours at the base rate is the usual choice for hourly staff.
- Say what happens when someone works the holiday: the normal rate, a premium such as time and a half, or a day off later.
- Say what happens when a holiday falls on a weekend or on someone's day off.
- Put it in writing and apply it the same way to everyone it covers.
- Show holiday pay as its own line on the pay stub, with its hours, so it isn't confused with hours worked.
Where PayDocs fits
PayDocs makes the pay stub from your payroll figures. The generator has a one-tap "Holiday pay" earnings line, so paid holiday hours sit on their own row next to regular hours and any holiday premium. PayDocs works out federal income tax, Social Security, Medicare and supported state taxes for 2026 pay dates (see what we calculate). You preview free and pay per stub.
This is general information about federal rules for employers, not tax or legal advice. State and local rules can add to it.
Questions
Is holiday pay required by law?
Not under federal law. The Department of Labor says the FLSA doesn't require payment for holidays not worked; it's a matter of agreement. Federal service and construction contracts and some state laws can add requirements.
Do I have to pay time and a half on holidays?
Not under the FLSA, which only requires time and a half for hours over 40 in a workweek. Some states, such as Rhode Island, require a premium for holiday work, and your own policy may promise one.
Does holiday pay count toward overtime?
No. Overtime is owed on hours actually worked over 40 in a workweek. Pay for a holiday not worked isn't hours worked and isn't part of the regular rate.
Can I dock an exempt employee for a holiday closure?
No. An exempt employee must get the full salary for any week in which they do any work, and you can't deduct for days when you closed and work wasn't available.
Are federal holidays paid holidays for private employers?
Only if you choose to make them paid. Federal holidays are the days federal offices close; private employers decide which holidays they pay for, usually starting from the federal list.
Sources
- US Department of Labor: Holiday pay
- US Department of Labor: Fact Sheet #23, Overtime pay requirements of the FLSA
- US Department of Labor: Fact Sheet #56A, Regular rate of pay under the FLSA
- US Department of Labor: Fact Sheet #17G, Salary basis requirement
- US Office of Personnel Management: Federal holidays
- Rhode Island Department of Labor and Training: Labor standards FAQ
Sources checked October 7, 2026. This article explains how pay documents work; it is not tax or legal advice.
