Holiday Pay for Exempts

HRQ · June 2004

Not sure if this is a Benefits or Wage & Hour question - maybe both.

Our current policy requires all employees meet a 90 day seniority requirement before they can use PTO or Holiday pay. I think I read somewhere that exempts cannot be forced to meet eligibility requirements for Holiday pay or PTO because this could result in the exempt ee not receiving their full week's salary.

I tried searching on the Forum and couldn't find my answer.

Thanks in advance for your help! x:)

Don D · June 2004

I'm not sure what a '90 day seniority requirement' is; but, you are right in your understanding that you cannot apply to an exempt a rule that might result in his/her being 'docked' in effect for holiday pay. When I started in this job 15 months ago, the policy was in place that required all employees to be employed 30 days in order to get paid for a holiday. That rule not only conflicted with every offer letter we right, but also would resulted in many exempts being unpaid for holidays, depending on when they were hired. That policy was changed retroactive two years to pay two exempts who were shortchanged just like I would have been. Also ditched the rule saying exempts must work the day before and after a holiday to be paid for the holiday. These are both archaic rules and butt heads with FLSA.

HRQ · June 2004

I knew I could count on you, Don D. x:)

By "seniority requirement", I did mean that all employees must be employed 90 days in order to be paid for a holiday.

In reviewing our policy I noticed we don't make the exception for exempts in writing, but we have been making the exception in practice, fortunately. I thought I better verify with my Forum friends before writing an addendum to the policy.

Thanks again!

crawfod · July 2004

A somewhat supporting document can be found at [url]www.dol.gov[/url] 29 CFR 541.118 which states:

(1) An employee will not be considered to be ``on a salary basis'' if deductions from his predetermined compensation are made for absences
occasioned by the employer or by the operating requirements of the business. Accordingly, if the employee is ready, willing, and able to
work, deductions may not be made for time when work is not available.

I couldn't find anything that directly says how "Holidays" are figured, but the above would seem to cover it.

In some ways you would think having a policy that established a waiting period for a benefit, such as Holiday pay, would allow employers to deny such pay to new employees, even if Exempt.
Our approach was just to waive the waiting period for such individuals.

Don D · July 2004

The larger question, however, is, why in the world would an employer, who has busted a gut to recruit an employee away from his other job, tell that employee that he will not be paid for a certain day due to the day on which he was hired? It makes absolutely no sense to me.

Holiday Pay for Exempts

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