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An HR Glossary for HR Terms

Glossary of Human Resources Management and Employee Benefit Terms

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Paid Holidays

What Are Paid Holidays?

Paid holidays are national, state, or religious holidays that employers can choose to give as paid days off to their employees. There is no federal law requiring employers to give their employees paid holidays as the Fair Labor Standards Act (FLSA) only regulates minimum wage and overtime pay. 

How Do Paid Holidays Affect Hourly vs. Salaried Employees?

As mentioned above, the FLSA does not require businesses to offer paid holidays to their employees, so whether these employees are hourly or salaried doesn’t affect the determination from a legal standpoint. The employer is the one to decide if they will give their employees a day off on a particular holiday and if this day will be a paid day off.

For hourly employees who are eligible for overtime pay, holidays aren’t considered to be any different from a normal workday and don’t automatically qualify these employees for overtime pay. Again, it’s up to employers to determine if they will offer more pay for work done during holidays. While salaried employees are paid on a yearly basis and aren’t subject to overtime pay, they also aren’t guaranteed paid holidays.

How Important Are Paid Holidays?

While there isn’t specific data on paid holidays, paid time off and vacation time are consistently listed among the most important benefits by both employees and employers. Many employees expect paid holidays and time off as part of their employment benefits. 

Some research suggests that employees may even choose these benefits over better pay. A survey by Fractl found that 80 percent of workers would consider choosing a lower paying job if it offered more vacation time. Better health benefits and more flexible work hours were the only other two benefits that ranked higher than vacation time.

Businesses owners also recognize that time off is important for their workers. Employers list leave as one of the top three most important benefits to their workforce, according to the Society for Human Resource Management (SHRM). 

What Are the Benefits of Offering Paid Holidays?

Again, while studies focus on paid time off in general, the benefits can be extended to paid holidays. SHRM reports that paid time off correlates with:

  • Increased productivity

  • Increased engagement

  • Better physical wellness

  • Positive employer brand

Whether a business offers paid holidays and which holidays it chooses will depend on the industry and the culture of the organization. However, from a more anecdotal perspective, employees want to spend holidays with their friends and families. Offering paid holidays will help them feel like the organization cares about their life beyond the job and about them as a whole person, gaining their loyalty and boosting satisfaction.

What Are the Most Common Paid Holidays?

According to a Bureau of Labor Statistics (BLS) survey from 2018, American workers get an average of eight paid holidays per year, with over three out of four civilians workers receiving paid holidays.

Below are the most common paid holidays across all sectors (civilian, public, and government):

  • Memorial Day

  • Independence Day

  • Labor Day

  • Thanksgiving Day

  • Christmas Day

  • New Year’s Day

Employers may also choose to give other federal holidays as paid holidays. For more information, see our glossary entry on federal holidays.

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