Pay for working on a scheduled holiday.
hhaynal
231 Posts
I just found out that our company pays employees who work on a scheduled (paid) holiday are only paid 1.5 times the hours actually worked on that day. My reasoning tells me that if it is a paid holiday AND the employee works on that day, s/he should be paid the holiday pay PLUS hours worked, AND IF hours worked are in excess of 40, then s/he also gets overtime pay.
What say the forum? How do you handle such a situation?
What say the forum? How do you handle such a situation?
Comments
There is no federal or Delaware legal requirement that you pay individuals any particular rate for a holiday regardless if they work or do not work.
In addition, there is no requirement that you count holidays not worked as working time for FLSA purposes.
Finally, some employers have "anti-pyramiding" rules that prevent the 2.5 times rate that you suggest in your post. They basically say that the most you can get is X times the basic rate despite how many premimums you might be entitled to.
I look forward to seeing how other companies handle this issue.
Bill Bowser
Editor
Delaware Employment Law Letter
Young Conaway Stargatt & Taylor, LLP
The Brandywine Building
1000 West Street, 17th Floor
P.O. Box 391
Wilmington, DE 19899-0391
302-571-6601
302-576-3282 (fax)
We also consider the holiday pay as hours worked, so any time actually worked on a holiday would be considered overtime (1.5x) plus a .5x premium for work on a holiday. What really gets confusing is if an employee takes sick leave in that same week. It reduces their regular hours worked, so that holiday work may not be true overtime. But that's not how the policy is written... We also have issues with employees on 10-hour/4-day shifts. If they don't want to work extra in their holiday/3-day workweek to make up the two hours between holiday pay and regular day pay, then they have to burn two hours of vacation. Exempt employees get paid like they always do, regardless of whether they work on the holiday, though it'd be tough to defend against the policy.
From my personal experience, the toilet backs up or the kitchen sink clogs mostly on holidays. Plumbers and electricians in private industry get to charge customers premium prices for holiday work, so we figure we ought to be generously paying our guys that are dragged away from their families to do some nasty job. Showing up at a 20 minute drain unclogging gets him a day's pay plus "overtime" for the actual minutes worked. And we have only one employee on call that would be responding to these run-of-the-mill "emergencies," so our overhead payroll isn't significantly increased. If the emergency is so big (e.g. street-wide gas leak) that a supervisor is required to respond, we'll probably have at least three decision makers involved who are all exempt, and they all receive only their regular pay.
I agree that if a company had to have an entire shift working on a holiday, our pay policy would become expensive. No one here is ever *scheduled* to work on a holiday.
If you're paying 1.5 times their hourly rate for working on a holiday, you have to look at your policy again to see if they are entitled to 8 hours holiday pay in addition.
An employee would reason that they could stay home and get 8 hours pay or come to work and get 12 hours pay. If working that day is mandatory, it's going to seem 'unfair' to them.
We pay 2 1/2 times for all hours worked. A 12-hour shift gets you 30 hours pay.
The issue has nothing to do with OT. The FLSA does not require OT pay for hours not worked, i.e., holidays, vacations, etc. Very few companies include holiday pay in their OT computations. I was surprised that some of the responders do, as this is a very expensive and unnecessary way of doing business.
The holiday pay issue is one that defines a company's approach to giving their employees the best possible work environment, while also furthering the basic need of the company, i.e., to make a profit.
We pay double time for hours worked on a paid holiday. We voluntarily pay this (no legal requirement) for two reasons:
1. If it's important enough for us to take an employee away from his/her family on New Year's Day, July 4th, or whatever, then it seems appropriate to pay that employee for his/her giving up their holiday.
2. By making the department head and plant manager have the extra pay costs added to their overhead expenses (for which we hold them responsible), they will think twice about the need to bring in an employee on a holiday. That department head or plant manager will hopefully better organize his/her schedule so as to make holiday work unnecessary or at least rare.
When I first arrived at my current company, we paid straight pay in addition to holiday pay for work on holidays. A lot of employees complained about having to work on holidays. One of our better maintenance troops resigned and told me at his separation briefing that having to work on holidays was one of his primary reasons for quiting. The plant manager at the time was single and didn't have a problem working on a holiday. He accepted it as just another day. I was able to convince our president that by paying double on holidays, we would actually reduce our costs and improve employee morale, thus reducing turnover. The plant manager was the one who actually fought me the hardest, as he was losing a good, cheap labor pool and apparently didn't care about employee morale or turnover.
Since we incorporated the double time standard, we now rarely work on holidays, employee morale is much higher (very little turnover), our department heads organize their work schedule so as not to need their employees on holidays, and (though I haven't had time to specifically tracked it) common sense says that our costs are less (from a payroll, training, and workers' comp standpoint). And in case you're wondering, we do specifically track OT and it has not gone up as a result of not working on holidays.
Just my thoughts!