Episode 301: Year-Round Holiday Pay

In this week’s episode of What The Hell Just Happened?! Paul Edwards sits down with CEDR Solution Center Specialist Jason Post to discuss one of the easiest tasks you can do to save yourself a ton of time throughout the year: setting up all your holidays and paid days off in advance and distributing that information to your team. Are you required to pay your employees for federal holidays? Why is this so important and how can it save you time? What do you do about holidays that happen over the weekends? Listen now to hear the answers to all of these questions and more to help ensure you have a clear and compliant year ahead.


Voice Over: You’re about to listen to another episode of What The Hell Just Happened?! Join Paul Edwards and his guests as they discuss and sometimes even solve some interesting HR problems. 

Paul: And… I’m gonna go off the rails sometimes and talk about whatever I want. 

Jason: Hey, Paul, how are you doing?

Paul: You know, I’m actually doing really well. I know that this podcast probably won’t go out until maybe February or something like that. But since you asked I’m doing really good, because I had a very long holiday. 

Jason: That’s great.

Paul: I took some time away.

Jason: That’s great. You know, it’s always a good thing to get a restful recharge.

Paul: Yea recharge the batteries and just. Yeah, so that’s how I’m doing. And I’m trying to get my brain going again, and you know, I did a really good job this time.

Jason: It’s kind of like jet lag, only different.

Paul: Well, I jumped up today. Yeah, it is. It is a little bit like jet lag, except for- you’re well-rested and you were at home almost the entire time. 

Jason: Right. 

Paul: That’s how exciting my life is. I got up to go to come to work today. Tuesdays, I always bring the dog and drop the dog off at daycare. And she was very excited.

Paul: She was like, finally.

Jason: I get to see my friends again

Paul: I Get to see my friends again! Oh my gosh put the collar on, put it on, put it on, put the collar on, and take me to the car. So-

Jason: Of course. 

Paul: So, yeah

Jason: That’s awesome. 

Paul: How about you? How were the holidays for you?

Jason: Doing well. Yeah. My family doesn’t really do anything much, so it was nice. Just kind of a peaceful weekend.

Paul: A little time off

Jason: Yeah, a little bit of time off, a little bit to recharge, you know, get some of that rest in. So it was good. Nice.

Paul: Nice. Yeah. So what are we going to talk about today?

Jason: Well, on the same topic.

Paul: Spoiler alert.

Jason: Spoiler, guys. We’re going to get deep into it. Holiday pay and the administration. 

Paul: No way! How did I know that? It’s like I knew that was coming.

Jason: Did we tell you what we’re talking about?

Paul: Might have about a minute ago.

Jason: OK, so we’ve seen a lot of questions on the administrative end. Right, on how do we do holiday pay? What qualifies as an observance, do we really have to observe the same thing the federal. Laws on the federal holidays and their observance days?  Really what’s what’s going on with that especially when the recent holidays were on the weekend. 

Paul: Right. 

Jason: So how do we deal with that?

Paul: OK, so this is another podcast that is basically an HR  lesson if you’re crafting holiday pay. This is a very easy topic to discuss. I said this on another podcast before, and I think maybe even with you, I think the important thing about holiday holidays is to have a good policy and to let everybody know what it is. So you just stop at the end of the year or the beginning of the year and you kind of say to your team, these are the days we’re going to observe. Now how you do that is completely 100% up to you.

Jason: Right

Paul: If you’re listening to me and you’re a private employer, you get to make up the rules around holiday pay. So the federal laws, you tell them

Jason: yeah, technically 

Paul: Diddly.

Jason: Yeah, federal laws do not speak to it. Private employers are not required to observe a holiday or provide one. Even a special rate of pay. Yeah. You know, a lot of times we hear about, oh, 1.5 times your rate of pay on a holiday The federal law doesn’t say anything about that. There are some states that do, of course. 

Paul: Yeah

Jason: In certain areas, the state laws speak to it. But really, it’s up to the owner.

Paul: To the private employer

Jason: To the private employer, yeah.

Paul: So, you know, if you’ve got a union and not many of our employers have unions, they may negotiate for something like time and a half, or they may negotiate for a certain number of days off on behalf of the employee. And if you’re in the government sector or a teacher or any of those, there’s a different discussion for all you guys.

Jason: Exactly

Paul: This isn’t the discussion for that.

Jason: Right. And so you could basically just create your own closure calendar. Right. In a sense, it is just saying, “hey, here’s what’s going on. Here’s the- you know, we’re going to provide this day off paid or we’re going to provide this day off unpaid. But, you know, the business is going to close for this amount of time for the rest of the year” and just kind of give it to them upfront.

Jason: Right? Almost like a team memo.

Paul: Yeah. Yeah. You just let everybody know you own it, Okay, I’m just thinking about all the ways I’ve seen this manifest. I’ll just share this. We’ve been doing this for years now. 16, 17 years. Most of my doctors that I’ve come into contact with do it the following way, either at the end of the year or the beginning of the year, they just get with the team and they talk to the team about what they’re going to do over the next year.

Paul: And a lot of our doctors close for a week or two during the summer or during hunting season or, you know, whatever it is that their passion may be around and they let the team know this is what I’m going to be doing. And we’d like for everybody to take the same time off, recognizing that some people may have weddings and other things where they have to take other extended time off.

Paul: And it may not work out that way, but they come to some kind of agreement. I think the other thing that I want to put into this, because the past couple of years have played this way, Christmas or the holiday, whatever the main holidays have been, have been falling on Saturdays and Sundays. So the question is, I’m sure you guys get, because I didn’t deal with that at the beginning of the year. Do I have to pay them for a day off on Monday? 

Jason: Right, Everybody’s kind of scrambling and saying, hey, wait a minute, my employees are asking me this. How do I actually do that on a weekend? So now they’re telling me that it was a federal holiday. What do I do with that?

Paul: Yeah. So you do nothing with it because federal holiday doesn’t mean anything.

Jason: For a private employer.

Paul: Right and we often put it in the policy so that if you get paid for the holiday, if it falls on a day that you normally work. 

Jason: Right. 

Paul: So if the practice is always closed on Fridays or always closed on Mondays and a holiday falls on one of those days, the natural logic is that there’s not anything out there.

Paul: I do want to say that policy works on another layer, which is to say to someone who has a varying schedule or who only works for you like three days out of the week and they work at another practice for a couple of days out of the week. I’m not paying you for Friday. I’m not paying you for that holiday. That’s not a day that you’re normally in here on Fridays.

Jason: Right, exactly. And basically. So then what would qualify as an observance like if the practice closes?  Like if you decide to like as you mentioned, maybe you do have normal business hours on Monday, but you decide to close on Monday for the holiday.

Paul: Right or you decide to stay open on Monday. You open up on Monday. But even though the day fell on a Sunday, you go ahead and pay it to make everybody feel like they at least got paid for the day off, when it may have been disqualified in the policy. I mean, you have some leeway here.

Jason: Yeah, some flexibility. Some courtesy you know, extend some goodwill, good faith application to the policy.

Paul: And to recharge people. You want to recharge people, you want your people to recharge, you want to refresh. You don’t want them resentful because they didn’t get time off that other people got time off.

Jason: Right. Exactly. So now you had already mentioned kind of the out-of-office policy, so to speak. Now, does that mean I can use that as a loophole to never pay holidays?

Paul: Yeah. I mean, you could… This is one of those things where you can create whatever kind of good or crappy policy that you want. Well, crappy policy means something else to me. A crappy policy to me is one that’s been written by someone who doesn’t know what they’re doing. 

Jason: Right. 

Paul: That’s a crappy policy to me. You could write a policy to be as generous or not generous as you want to. You can stick as close to your rules as you, as you, as you choose to.

Jason: Because realistically, everything is at the discretion of management or owner. Right? It’s all at their discretion.

Paul: It is. I always want to be careful about that word, discretion, too. It’s at your- I’d like for it to be at your singular discretion. Meaning at one point you singularly focused on this and created a policy that you apply to everybody and everything is equally as you can.

Jason: Yeah. Equal treatment is important

Paul: And if you’re going to treat something different, not someone different you’re going to treat something different. I feel better if you had something in place already, like what we discussed, like if it falls on a weekend or a day, you don’t normally work. We don’t pay it. Right. But you say to everybody, I’ve made an exception for everybody who works here and we will be paying for that day.

Paul: Right? Even though you don’t normally work on it. 

Jason: Which boosts morale. You know, kind of to your point, if you want your employees to be happy to work for you.

Paul: And you want them to be able to make ends meet, the more we want them to be able to take care of their families, to be able to take care of themselves and, you know, do all the things that the money does for the people who paid the money to.

Jason: Yeah. Yeah. It’s a necessary evil.

Paul: So when it comes to holiday pay, there’s little to almost nothing that governs you other than we’re telling you. Make sure that you get this straight. And then no policy can cover every single scenario of every single thing. This is a very good example of one that’s a little difficult to apply when it comes to the weekends and stuff like that.

Jason: Right

Paul: Just look out ahead and say, this is what we’re going to do. We’re going to take that Monday off. We’re going to take that Friday off.

Jason: Yeah

Paul: Whatever that looks like. 

Jason: True. It’s an extra couple of minutes of work, but realistically, it saves you almost the entire year’s worth of headaches so to speak

Paul: No questions, what day are we taking off? I don’t know. What did we do last year? So I’m going to go back and look. 

Jason: Right.

Paul:  I’d like to add one more thing to this. You have historical data. If you’re a new dentist, or new practice, you may not have this historical data. So you’re asking us and we’re trying to tell you what we know works.

Paul: If you’ve been doing this for a while, you know what days your patients are going to come. You know, even if you did open on Monday, that you would only see a few people and maybe not worth it.

Jason: Yeah like the production metrics and everything like that. Yeah of course.

Paul: We look back and use your historical data as well. Okay, that was a very HR-focused thing. For those of you out there who can still hear my voice right now, sleep well. Because you put this on at about 11:00 at night and you’ve only heard half of it. And maybe when you wake up in the morning, you know you’re bringing the podcast back up because this was so H.R.

Jason: It was so HR, this was a very-

Paul: But we may put people to sleep.

Jason: Information by osmosis. 

Paul: Yes. 

Jason: We thank you very much. 

Paul: Yeah. 

Jason: For the fact that you took your time out of your busy days. 

Paul: Sweet dreams. 

Voice Over: Thanks for joining us for this week’s episode of What The Hell Just Happened? do Paul a favor; share this with your network. If you have an HR issue or a question, you’d like us to discuss on this show, send it to podcast@WTHjusthappened.com. For more HR advice and insights from Paul and his team of experts, you can also join the private Facebook group, HR Base Camp, or visit HRbasecamp.com. Make sure you tune in next week. And remember: better workplaces make better lives.

Jan 31, 2023

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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