There are many holidays businesses can celebrate with paid time off. Before choosing which ones to observe, you should know your options and how to craft your PTO policy.
There are dozens of observed holidays in the United States. Some are recognized at a federal level, while others are state-level holidays. Holidays can be religious, political or secular.
With so many holidays celebrated by American workers, employers may find it difficult to determine which holidays they should observe by offering their employees paid time off. We’ll explain the factors involved in your holiday decisions and share the benefits of offering paid holidays as part of your employee benefits package.
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The Standard Paid Holiday Schedule: A Comprehensive Guide
Paid holidays provide employees with paid time off for major holidays and events. But what exactly constitutes a common paid holiday schedule in the U.S.? In this comprehensive guide, I’ll break down the typical paid holidays, discuss variations between employers, and explain how holiday schedules affect pay.
What Are Paid Holidays?
Paid holidays are days off from work where employees still receive their regular pay Employers designate certain holidays, usually major national and religious observances, as paid holidays
On these days, employees can take the time off to relax, spend time with family, celebrate events, or observe religious traditions without losing wages or taking vacation days. Many companies choose to offer paid holidays as an employee benefit.
The Standard U.S. Paid Holiday Schedule
While there are no federal legal requirements for private employers to provide paid holidays, a standard paid holiday schedule has emerged
- New Year’s Day
- Memorial Day
- Juneteenth
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
Most employers provide these seven major holidays as paid holidays. Many also add in 3-4 more paid holidays. This results in the average U.S. worker receiving 8-10 paid holidays annually.
Let’s look at some of the most common additional paid holidays:
- Martin Luther King Jr. Day
- Presidents’ Day
- Good Friday/Easter Monday
- Veterans Day
- Day after Thanksgiving
- Christmas Eve
This brings the total paid holidays to between 10-12 days for most workers. However, scheduling varies significantly by employer and industry.
Key Factors in Paid Holiday Schedules
Several factors account for differences in paid holiday schedules among U.S. employers:
Industry Customs: Some industries have standard paid holiday schedules. For example, the financial sector tends to follow stock exchange holidays.
Regional Variations: Days like Confederate Memorial Day or Bunker Hill Day are regional paid holidays in certain states.
Religious Diversity: Days like Diwali or Eid may be paid holidays to accommodate religious minorities.
Employee Preferences: Companies may add floating holidays for diversity and work-life balance.
Staffing Needs: Retailers and emergency services often require holiday staffing.
Union Contracts: Some union agreements determine holiday schedules.
So employers tailor paid holiday schedules based on business needs, employee demographics, and cultural factors.
Comparing Private and Public Holiday Schedules
Most private employers offer a subset of the 10 federal holidays. The federal holiday schedule includes:
- New Year’s Day
- Birthday of Martin Luther King, Jr.
- Washington’s Birthday
- Memorial Day
- Juneteenth
- Independence Day
- Labor Day
- Columbus Day
- Veterans Day
- Thanksgiving Day
- Christmas Day
Private employers are not required to follow the federal schedule. But many use it as a baseline and then customize based on preferences like adding Good Friday or removing Columbus Day.
Some key differences:
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Federal schedule includes inauguration date and Columbus Day, rarely private holidays.
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Private schedule often includes Black Friday, Christmas Eve and New Year’s Eve, not federal holidays.
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Federal holidays falling on weekends move to Monday or Friday. Private schedules vary in this regard.
So the core holidays are similar, but private employers have more flexibility to tailor their paid schedule.
How Paid Holidays Affect Pay Cycles
Paid holidays influence employee pay cycles in a couple key ways:
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Holidays are paid as if it were a regular work day. Employees receive wages even while not working.
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Some payroll cycles are delayed if holidays coincide with scheduled pay dates. Employers often issue earlier payments in these cases.
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Hourly employees may qualify for overtime if the holiday results in over 40 hours worked that week.
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Employees who work the holiday are eligible for premium holiday pay, often 1.5x or 2x normal wages.
The key takeaway is that paid holiday schedules provide wage stability for employees while allowing time off to recharge. Employers should communicate clearly how holidays impact pay cycles.
Customizing Your Paid Holiday Schedule
While typical paid holiday schedules follow similar patterns, employers can customize holiday time off in a few ways:
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Offer culturally inclusive floating holidays that employees choose.
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Provide additional holidays like the day after Thanksgiving or Christmas Eve.
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Allow holiday swapping between days like Columbus Day and Veterans Day.
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Stagger departments so the business stays partially open on holidays.
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Provide “early leave” on holidays like Christmas Eve and New Year’s Eve.
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Survey employees to gauge interest in less common holidays.
Consider employee diversity, workloads, and operational needs when shaping your ideal paid holiday schedule.
Key Takeaways
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Most U.S. employers offer 6-10 paid holidays annually, averaging 8 days.
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The standard paid holiday schedule consists of major national events like July 4th and religious days like Christmas.
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Customization allows for employee flexibility and cultural/religious inclusion.
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Federal and private sector schedules share core holidays but also diverge.
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Holiday pay maintains income while employees take time off to reenergize.
Providing thoughtful and competitive holiday pay shows employees their time and work-life balance are valued. Paid holidays boost morale, motivation, and workplace sentiment when structured appropriately around business needs and employee lifestyles.
Measure the competition’s PTO practices.
Recruiting new employees and retaining them can be costly, which is why reducing employee turnover is crucial. Consider your competition’s holiday PTO practices when you’re putting your own together. If you don’t, you may find it harder to attract and retain top talent.
At the very least, you want to match what your rivals are doing. If you’re looking for an edge, you may want to add an extra holiday to the mix.
Incorporating holidays into your PTO policy
Small business owners usually can’t afford to give employees every federal and state holiday off, but they need to offer a few to lure talent and remain competitive. That’s why creating an official holiday PTO policy that considers your business’s financial situation and workers’ desires is essential.
Here are the steps business owners should take when creating a PTO policy.
Holiday Pay & Time Off – Your Questions Answered
What is a federal paid holiday schedule?
The federal paid holiday schedule is the schedule that federal employees follow. Some private companies also often recognize these paid holidays and other holidays, including: There are some less recognized paid holidays that managers can give to their team members.
Do employees get paid on holidays?
Most companies only offer paid holidays to full-time employees (who work 30 or more hours a week). For full-time hourly employees, common practice is to pay an employee for eight hours of work on the holiday. Salaried employees get paid their normal pay rate for the pay period.
What is a common paid holiday schedule?
The common paid holiday schedule is a schedule that many managers use to determine which paid holidays they give to their team.
What are paid holidays?
Holidays are workdays that employees are given off and still paid for. These days are often federal holidays, but can also be local or state holidays. Employees are paid what they would be paid on a normal workday. Why Are Paid Holidays Important? Paid holidays play an important role in the work-life balance of employees.
