What Are Paid Holidays?

Young woman takes a selfie with family and friends during a holiday celebration.
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 Klaus Vedfelt / Getty Images

A paid holiday is paid time off that allows an employee to observe a holiday if they choose.

Key Takeaways

  • Paid holidays are days off with pay given to an employee as part of their compensation. They're not required by law and may be negotiated.
  • Giving employees paid holidays allows them to observe a holiday if they choose.
  • Paid holidays vary from company to company but typically include major federally observed holidays such as New Year's Day and Christmas Day.

How Do Paid Holidays Work?

Paid holidays are days off with pay given to employees and are traditionally associated with federally observed holidays. They are not required by law. Typically, paid holidays are part of a larger compensation package that also includes other paid time off, such as vacation days and sick days.

The Fair Labor Standards Act (FLSA) does not mandate that employers pay employees for time not worked, such as vacations or holidays. Paid holidays, paid vacation, and paid sick leave are determined by the employer (or negotiated by the employee's representative, such as a union).

An employee with paid holidays typically receives a day off with pay for certain holidays, most often those recognized by the federal government. According to the U.S. Bureau of Labor Statistics, 79% of U.S. civilian workers had access to paid holidays in 2021. Workers in the private industry average eight paid holidays per year.

Note

Paid holidays are a normal part of a compensation and benefits package offered by employers to attract and retain employees. These holidays are usually listed in an employment offer letter and appear in an employee handbook.

Examples of Paid Holidays

The most common paid holidays in the U.S. are:

  • New Year's Day
  • Memorial Day
  • Independence Day
  • Labor Day
  • Thanksgiving Day
  • Christmas Day

The federal government recognizes the above holidays as well as the following:

  • Martin Luther King, Jr. Day
  • Washington's Birthday
  • Juneteenth
  • "Columbus Day" (also observed as Indigenous Peoples' Day)
  • Veterans Day

Other organizations may also add the following holidays to their schedule:

  • Easter
  • Good Friday
  • Friday after Thanksgiving
  • Christmas Eve
  • New Year's Eve

Sometimes, a company may offer a floating paid holiday that employees can take as needed. Other companies offer paid time off for the employee's birthday or for Election Day.

Note

Floating holidays give employees the opportunity to use paid time off to celebrate religious holidays, especially if the holiday isn't commonly a paid holiday. Employees can also use PTO, personal days, or paid vacation days to get paid for religious commemorations and family time off.

Benefits of Paid Holidays

Increasingly, competitively paid holidays and other time-off benefits are becoming crucial to an employer's ability to attract the best employees who have skills that are critical for the operation of the business.

Paid holidays may be negotiated by employees who have an employment contract. Senior-level employees with a contract are likely to have come from positions in other organizations where their seniority gave them the maximum paid holidays and vacation time.

Note

Senior-level employees are unlikely to settle for less time off when accepting a new position. In fact, if an employer doesn't offer equivalent paid vacation and holiday time, it may be a deal-breaker for the prospect—even if they don't typically use all of the time available.

Employer-paid vacation time can differ between exempt and non-exempt employees. Exempt employees are expected to work whatever hours are necessary to complete a job. They may have more flexibility in their schedule and less supervision, as well. These employees are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA). They're typically salaried workers.

Exempt employees in professional, technical, ormanagerial positions (such as software developers, HR staff, controllers, or marketing staff) may expect paid holidays to accompany their employment. Such employees are unlikely to accept positions in companies that don't offer paid time off for holidays. 

Nonexempt employees aren't exempt from the provisions of the FLSA. They're typically required to track their time and be paid for overtime work. They may be paid hourly or they may receive a salary. They may be less likely to have paid holidays, or they may receive fewer paid holidays than their exempt or salaried colleagues.

Part-time employees may receive some paid holidays, depending on the employer: For example, 79% of part-time employees received Labor Day as a paid holiday in 2018.

Note

Contract employees or consultants do not receive paid holidays—and they don't expect them. But, a contract worker who is employed by the contracting company, not the employer whose job site they work in, may receive paid holidays from the contracting company.

Alternatives to Paid Holidays

Some employers offer holiday pay for employees who work on a holiday when the office would normally be closed. Typically holiday pay would be expressed as a premium, such as time-and-a-half or double-time pay. Other employers may offer a day off without pay.

Frequently Asked Questions (FAQs)

What holidays do you usually get paid for?

New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day are the most common paid holidays. If you work those days, you might receive holiday pay. For federal workers, paid holidays also include Martin Luther King, Jr. Day, Washington's Birthday, Juneteenth, "Columbus Day" (also observed as Indigenous Peoples' Day), and Veterans Day.

How many paid federal holidays are there?

There are 11 paid federal holidays. Federal workers will typically get these days as paid holidays. Since federal workers usually work a Monday through Friday schedule, the paid holiday might be observed on a Friday or a Monday if the holiday itself falls on a weekend.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Department of Labor. "Vacation Leave."

  2. U.S. Bureau of Labor Statistics. "Employee Benefit Survey."

  3. U.S. Bureau of Labor Statistics. "Holiday Profiles."

  4. U.S. Office of Personnel Management. "Fact Sheet: Federal Holidays - Work Schedules and Pay."

  5. U.S. Department of Labor. "Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA)."

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