With the recent passing of Labor Day and the upcoming holiday season, realization occurred as it relates to payroll issues when a holiday occurs. I received an extraordinary amount of questions from Clients and employees who sought to understand their rights and entitlements.
Under the federal Fair Labor Standards Act (FLSA), covered employees (non-exempt) are entitled to at least minimum wage pay, plus overtime pay (hourly rate x 1.5) for hours worked in excess of 40 in a workweek. Currently, the federal minimum wage is $5.85, but many states have higher rates.
As it pertains to overtime, the key phrase is hours worked. A paid holiday does not count as hours worked when calculating overtime pay.
Additionally, the FLSA does not require employers to pay holiday or vacation pay to employees, yet it is considered more of a benefit.
Please contact National PEO if you have questions regarding the FLSA or other laws pertaining to employee rights.