Do part time employees get holiday pay in the US?

As an employer, you may be wondering: should your part-time workers get paid for holidays? After all, there’s no federal law requiring employers to provide holiday pay — whether for full-time or part-time.

However, for many businesses, holiday pay is a useful benefit to stay competitive and retain talent. Deciding whether to offer holiday pay to part-time workers isn’t just about costs; it’s about employee satisfaction, retention, and — crucially — compliance with any applicable state laws.

In this article, we’ll break down everything you need to know about holiday pay for part-time employees, including state legal requirements and common industry practices. So let’s dive straight in.

Are part-time employees entitled to holiday pay?

Under the Fair Labor Standards Act (FLSA), private employers are not required to provide paid holidays for any employees, whether full-time or part-time. The FLSA only mandates pay for hours actually worked, meaning employers don’t have to compensate workers for time off on holidays unless they choose to.

As mentioned, many businesses voluntarily provide paid holidays as a way to attract and retain employees. These policies can vary widely depending on your industry, as well as the size of your company and its financial leeway.

What about state-specific laws on holiday pay?

That said, some states have labor laws that require holiday pay in certain situations, although they mainly apply to public-sector employees or unionized workforces. For example:

• Massachusetts has Blue Laws, which require premium pay on certain holidays for retail workers.

• Rhode Island mandates time-and-a-half pay for employees working on specific holidays.

• Some union contracts require holiday pay for all employees, including part-time workers.

How does holiday pay differ across industries?

Holiday pay policies can also vary significantly depending on the industry. In tech, finance, and consulting, for instance, companies are more likely to offer holiday pay to both full-time and part-time employees, with many companies providing pro-rated holiday pay. This is especially true for highly-skilled workers.

However, in retail and hospitality, companies are less likely to offer paid holidays to part-time workers.

How does holiday pay work for part-time employees?

If you do opt to offer holiday pay as a benefit to your part-time workers, there are some commonly-practiced employer policies you can consider adopting, such as:

Hour-based eligibility

Some companies provide holiday pay only to part-time employees who meet a minimum weekly hours threshold. Typically, in such cases:

• Employees working 20 to 35 hours per week receive the same holiday pay as full-time staff.

• Employees working 15-20 hours per week receive a prorated amount of holiday pay.

• Employees working fewer than 15 hours per week may not qualify for any paid holidays.

For example, you might offer full holiday pay to part-time employees who work 30+ hours per week, and 50% of a full-time employee’s holiday pay to those working 15-20 hours.

Pro-rated holiday pay

Rather than a strict hour-based cutoff, some employers provide a percentage of holiday pay based on average weekly hours worked. This method ensures fairness across employees with varying schedules.

For example, if a full-time employee gets 8 hours of paid holiday, a part-time employee who works half as many weekly hours might receive 4 hours of paid holiday.

Tenure-based holiday pay

Another option is to offer holiday pay to part-time employees only after they’ve worked for your company for a certain period.

For instance, you might offer no holiday pay for the first six months, then introduce prorated holiday pay after that.

Industry-specific holiday pay

As touched upon, employees in certain industries may have certain expectations around what they should be offered. As a result, you can look at what other companies in your sector are doing, and either match or better those policies.

What are the pros and cons of offering holiday pay to part-time workers?

There are benefits and drawbacks to providing holiday pay for part-time employees, as follows:

Advantages

Offering holiday pay to your part-time staff can be a smart investment in employee satisfaction and retention. Specifically, it can:

• Boost morale and engagement. Employees who receive paid holidays feel valued and appreciated, leading to higher job satisfaction. A positive work culture can lead to increased productivity — and a better customer experience.

• Enhance retention and reduce turnover. Holiday pay is a competitive benefit that can encourage your people to stay with you. In turn, this reduced turnover can save your business money on hiring, training, and lost productivity.

• Help attract top talent in competitive markets. Job seekers — even part-time ones — compare benefits when choosing where to work, and offering holiday pay can give you a competitive edge.

• Encourage work-life balance and employee wellbeing. Paid time off allows your employees to rest and recharge, reducing burnout and absenteeism. By supporting their work-life balance in this way, you may receive greater loyalty and long-term commitment.

Disadvantages

That said, while there are many benefits, employers should also weigh the potential downsides, as follows:

• Increased payroll costs. Paying part-time employees for holidays adds to labor costs, especially for small businesses with tight budgets.

• Potential disputes over eligibility. If your policies are unclear, employees might challenge decisions about who qualifies for holiday pay. Disparities between full-time and part-time staff can also impact morale if your people feel that the policies are unfair.

• Administrative complexity. Tracking eligibility for holiday pay can be logistically challenging, especially if your policies vary by hours worked or tenure. Employers must ensure fair and consistent application of holiday pay to avoid legal risks.

Best practices when offering holiday pay to part-time employees

To avoid disputes, it’s crucial to create and implement a clear, well-defined policy. To do this, ensure you:

• Evaluate industry standards. Where possible, research what competitors in your industry are offering to ensure your policy at least matches. Note that, if holiday pay isn’t feasible, consider offering viable alternatives such as bonuses, gift cards, or other perks and benefits to show appreciation.

• Clearly define who qualifies. Specify the minimum work hours required for holiday pay eligibility, and clarify whether new hires and/or seasonal workers qualify.

• Consider offering pro-rated pay. To help ensure fairness, you may want to adjust holiday pay based on average weekly hours.

• Communicate the policy in a transparent way. Provide a written holiday pay policy in your employee handbook, and train managers and HR teams to ensure consistent application.

How can Remote help?

Remote’s centralized Payroll platform makes it quick and easy for you to track your employees’ hours, removing the administrative headache and ensuring that there are no disputes over eligibility.

We also automate your calculations and deductions, ensuring you are fully compliant with all local, state, and federal payroll tax regulations. 

To learn more about how Remote Payroll can make your life easier, speak to one of our friendly experts today.

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