For those celebrating the upcoming Christmas holiday, your preparation level up to this point has either induced sheer panic or pure relaxation. For business owners, it could be a combination of both.

If you’re closing up shop for the holiday, here’s a quick reminder of whether or not you’re required to pay your employees.


According to federal law (and most state laws) you are not required to pay employees if you give time off for holidays. This benefit is generally a matter of agreement between the employer and an employee and most definitely should be clearly communicated in an employee handbook.

Keep in mind that when it comes to exempt employees, he or she must be paid the full salary amount if that employee performs any work during a workweek. Note: A workweek is the predefined seven day period you use for payroll purposes.

Many businesses do opt to pay non-exempt workers for holiday closures. The payment and calculation of the holiday pay is up to the employer’s discretion.

Staying Open

If your small business is staying open on the holiday, extra compensation for work is commonly a matter of company policy. However, employers must comply with specific state law requirements regarding holiday pay.

Some companies may pay employees at a special rate for holiday shifts, but generally an employee is only entitled to his or her regular pay, plus any overtime.

States will generally enforce an employer’s written policy regarding holiday pay, so employers should follow documented company policy.

For more details regarding guidelines surrounding time off for religious holidays, read here.

Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.