As employers prepare for the year-end holidays, it is a good time to review how holiday schedules and pay policies work under California law.
In California, state law generally does not require employers to provide paid holidays, close their businesses, or give employees a day off for a particular holiday. Employers may decide which holidays to observe and whether to remain open.
Working on a holiday does not automatically mean premium pay is due. California does not require a special holiday, Saturday, or Sunday pay rate simply because an employee works on one of those days. Unless an employer’s policy or practice, employment agreement, or collective bargaining agreement promises a holiday premium, the employee is generally entitled to regular pay for straight-time hours and any overtime pay required by law.
Holiday pay for time not worked does not count as hours worked for overtime purposes. For example, if an employer pays an employee for a holiday closure and the employee works 40 hours on other days that week, the holiday pay does not by itself make the employee eligible for overtime. Overtime is calculated based on hours actually worked, not total hours for which the employee received pay.
Employers should also distinguish between legal requirements and their own policies. Although state law does not require paid holidays, an employer may choose to offer paid time off or a premium rate for holiday work. Once communicated or applied, those benefits may be governed by the employer’s written policy, established practice, employment agreements, or a collective bargaining agreement. Employers should review those terms before changing a holiday schedule or pay practice.
Before holiday schedules are finalized, employers can check whether managers understand the applicable policies, whether payroll systems capture holiday hours accurately, and whether work schedules could trigger daily, weekly, or seventh-day overtime. Clear communication can help employees understand which days the business will be open, whether holiday time off will be paid, and how work performed on a holiday will be compensated.