Holiday Pay in California: What You Need to Know

August 19, 2022

In recognition of the holidays, employees are often given time off with pay and other benefits. If you work in California or another state, your company may provide additional employee holiday benefits. You may be eligible for paid time off on certain holidays and paid vacation days if you meet a particular service threshold with your employer.

However, these benefits come at a cost to the employee. They are considered "voluntary" wages, which means that they are not required by law, but instead offered by your employer as a bonus in recognition of the season and typically cannot be taken away once given.

This article will cover what you need to know about holiday pay to plan this coming year accordingly.

What Is the New California Wage & Hour Law?

The Healthy Workplace Healthy Family Act of 2014, which went into effect on July 1st of 2015 mandates that all eligible employees be given a minimum of three paid sick days per year. Employees, including part-time and temporary employees, will earn at least one hour of paid leave for every 30 hours worked.

California wage and hour laws apply to all non-exempt employees in the state of California. This means that employees scheduled to work must be compensated with at least the state minimum wage for every hour worked. 

Rules for Holiday Pay in CA

The California law does not include provisions regarding paid holiday leave. However, it does include a provision that allows the state's Department of Industrial Relations (DIR) to create and publish regulations related to the law. 

And, as it turns out, the DIR is preparing to do just that. The DIR published a proposed regulation requiring all employers to pay employees for all their work hours, including paid time off (vacation and PTO).

In other words, the proposed regulation would make it mandatory for employers to pay employees for all hours worked, including sick leave, vacation, and holidays. In the proposed regulation, the DIR estimates that "the vast majority" of employers will be required to pay employees for paid sick leave, vacation, and holidays.

What Is Holiday Pay?

Holiday pay is the monetary bonus you receive for working a holiday, which is typically higher than your regular rate. Depending on your employer, you may also receive a day off with pay to make up for the fact that you worked on a day that is normally off.

For example, if you’re an employee at a retail store and they close on Thanksgiving, you’ll likely receive holiday pay for that day. You may also be offered additional paid leave days.

When Does An Employer Have To Provide Holiday Pay?

Holiday pay is voluntary. Companies are not required to provide it, but many do. Employers may set requirements for employees in order for them to qualify for holiday pay. Employees may be required to work the day before and day after a holiday in order to qualify for pay, or employees may have to have worked a certain amount of time before they qualify for paid holidays.

Which Holidays Are Paid In California?

This varies based on the company, but generally, the following holidays are paid in California: New Year's Day, Martin Luther King Day, Presidents' Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. Again, employers are not required but can offer these as paid holidays.

How Is Holiday Pay Calculated?

Holiday pay is voluntary, so the company can set its own rules for calculating holiday pay. However, it’s in your best interest to review your company’s policies and speak with your manager if you have any questions before the holidays. 

Generally, companies calculate holiday pay based on your hourly rate. For example, if you earn $15/hour and work a six-hour shift on Thanksgiving, you’ll get six hours of holiday pay at $15/hour.

Tips for Requesting Paid Holidays

Ask early. You’ll likely encounter a lot of last-minute requests in the month leading up to the holidays. Since holiday pay is voluntary, it’s better to ask your manager early, so they have time to consider your request.

Be specific. You may want two weeks off to travel, but your manager may only be able to offer you a week. Provide them with a few options and see what they can do.

Be understanding. Your company may be facing financial challenges and might not be able to offer paid leave for every holiday.

Exceptions to Paid Holidays in California

Certain companies have specific exceptions to paid holidays, including those in the transportation industry. Suppose an employer is required to provide paid holidays and you work in the transportation industry. In that case, you may be eligible for a minimum payment as set by the Department of Industrial Relations.

If you work in a healthcare facility, you may be eligible for different rules surrounding paid holidays. If you are a union employee, the contract terms between your employer and the union representing you may differ from the state laws regarding paid holidays.

Frequently Asked Questions

Can I take the day off on another day if I work on a holiday?

This depends on your company and its policies. If you work for a company that allows you to trade holidays, consider trading a paid holiday for paid time off on another day.

What is the legal definition of a holiday?

California law does not provide a specific definition of a holiday. Companies have the right to define holidays however they choose. If your company does not pay you for holidays, you may be entitled to overtime pay if you work more than 8 hours on a holiday.

If I work on a paid holiday, do I get paid extra?

There is no law requiring extra pay for working on holidays in California. However, if your company chooses to pay employees extra for working on holidays, it must be included in your wage statement (pay stub). For example, if you are paid $15/hour and receive an additional $3/hour for working on a holiday, this should be included in your wage statement.

When does my regular pay period end if I work on a paid holiday?

Your pay period is the time between your scheduled pay dates. For example, if you are paid every two weeks, your pay period is 14 days. If you work on a holiday, it will usually be included in your next scheduled pay period.

Bottom Line: Is it now mandatory to pay employees during the holidays?

Answer - No.

The holidays are a special time of year, and many companies provide additional benefits in recognition of the season and throughout the year. Holiday pay is often voluntary, so your company does not have to give it to you. If your company offers holiday pay, it’s important to review its policies and speak with your manager to understand how it is calculated.

While the DIR is working to change this, unfortunately, we don't have the exact date that this change will go into effect. Until then, employers are not required to pay employees for any holidays.

With that in mind, it is important to remember that there is no law requiring employers to pay their employees during the holidays in California. Therefore, before you decide how to compensate your employees, ensure you understand the new wage and hour law and how it applies to your establishment.


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