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Holiday...To Pay or not to Pay

Holidays can be a challenging time for small businesses. Especially when it comes to holiday pay. Managers often ask, "Why should I pay employees for a day that they don't work?" Well, actually you don't have to pay employees for a holiday when the facility is closed. Department of Labor as well as the Texas Workforce Commission state that employers are not required to pay employees for time not worked. The real question is should you pay employees when the facility is closed for a holiday?


In my opinion, the answer is yes. Employers should pay employees for the holiday when the facility is closed, if they are financially able to do so. This is a great benefit to include in your benefits package that will create good will with your employees. The key with doing this is to have a written policy specifying which holidays in which the facility will be closed and how the employee will be paid. Be sure to include information about pay if the employee is asked to work or called in to work on a holiday.


What about temporary workers working through an agency and independent contractors? The answer is no. Employers are not required to pay contractors holiday pay. But should they? In my opinion, the answer is still no. Paying contractors for holiday pay is a benefit that should be reserved only for employees. Temporary contractors are already covered as many agencies often offer holiday pay for select holidays. Holiday pay for independent contractors is a slippery slope into graying the lines between contractor and employee which can be a costly mistake if a contractor decides to file a complaint that they were actually an employee.

Overall, holiday pay for employees is a great benefit that will go a long way in helping to retain employees. Whether you pay or not pay, having a written policy is key. Be sure to consult with your legal counsel.


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