Holiday Observance: Desired Or Required?

If the employer chooses to shut down for a holiday (e.g.: Labor Day, Thanksgiving, Christmas, etc.), the salaried worker must be paid the full salary for the entire workweek.

By Velissa R. Chapa

As the holiday season approaches, employers may have questions concerning the laws surrounding holiday leave. Employers in past years have contacted our Texas Workforce Commission (TWC) employer hotline with questions about this issue, and many were surprised to hear the answers. This area of the law can be difficult for employers to navigate due to the variables involved.

The following information should serve to clarify how employers may approach issues involving holidays and the workplace.

Observance vs. Granting Requests for Time off

Employers should first note that there is a difference between an employer closing temporarily to observe a holiday and an employer granting an employee’s request for holiday time off from work.

Regarding observance, employers are not required to close down to observe a holiday, regardless of the number of employees in the company or whether the holiday is religious in nature. Similarly, employers are generally not required to grant an employee time off for non-religious holidays, such as Labor Day or New Year’s Eve, to name a few.

Holidays Connected to National Origin

Employers with 4 or more employees should reasonably accommodate an employee’s request for time off to celebrate a holiday that is connected to his or her national origin (e.g.: Chinese New Year).

Terminating an employee who missed work to celebrate such a holiday could potentially result in a violation of the Immigration Reform and Control Act of 1986 (IRCA). For more information on IRCA, please review the following link: https://www.eeoc.gov/laws/types/nationalorigin.cfm

Less Than 15 Employees

Employers with less than 15 employees are not required to grant time off for religious holidays. However, employers are often encouraged to do so in order to foster goodwill with employees and boost company morale.

15 or More Employees

Employers with 15 or more employees are covered by Title VII of the Civil Rights Act of 1964.

This federal law prohibits religious discrimination and requires employers to reasonably accommodate employees who request time off for a sincerely held religious belief.

Employers should be careful not to deny a request simply because the employee’s religious beliefs changed over time, as that factor alone does not establish that the belief is not sincere. Reasonable accommodation for observance of a religious holiday is not optional for employers in this category.

If an employer refuses to offer a reasonable accommodation, it must show that the accommodation would have caused an undue hardship for the business. According to the Equal Employment Opportunity Commission, undue hardship exists if the accommodation “would cause more than de minimis cost on the operation of the employer’s business.”

Relevant factors include monetary costs as well as other effects on the workplace, such as workplace safety concerns, infringement on the rights or benefits of other employees, or the effect it would have on workplace efficiency.

For a more in-depth analysis of reasonable accommodation for religious beliefs or practices, please see the following link: https://www.eeoc.gov/policy/docs/qanda_religion.html

Must Leave be Paid?

Concerning hourly workers, the short answer is no. Employers are not required to pay hourly employees for time they do not work. This includes holidays, regardless of whether the employer closed for the holiday or if the employee requested to be off for the holiday.

Employers should also note that such paid holiday leave does not count towards time worked for overtime purposes, because the hourly employee did not work those holiday hours. The answer to this question is more complicated for salaried workers.

If the employer chooses to shut down for a holiday (e.g.: Labor Day, Thanksgiving, Christmas, etc.), the salaried worker must be paid the full salary for the entire workweek. Under this scenario, hourly employees may feel as if they are being treated unfairly compared to salaried workers.

In order to remedy this issue, employers can consider several options. One option is to offer paid holidays for the hourly workers in order to strike a good balance. Other employers will elect to give hourly employees an additional day of paid time off to add to their leave banks.

The rules for salaried workers are different in cases where the business is open but the employee requests time off for a holiday. In this scenario, the employee’s request would count as personal time off from work.

If the employer wants this time off to be unpaid, the employer should first check if there is any time in the employee’s leave bank. If so, the employer could take the time from the leave bank.

If the employee does not have any leave time available, the employer may deduct a full day’s pay, but the employer should obtain written permission from the employee before doing so.

For guidance, employers are encouraged to review a sample wage deduction authorization agreement at the following link: http://www.twc.state.tx.us/news/efte/wage_deduction_auth orization_ agreement.html (number 12 on the list covers this particular scenario).

Employers should note that partial day deductions are not allowed under law, even with the employee’s written consent.

Holiday Policy Recommended

Employers should have a holiday policy in writing so that each employee fully understands the employer’s rules.

Employers should also note that even though the law does not require paid holiday leave, the employer’s written policy will be enforceable under state payday laws. Whatever the employer has stipulated in the policy or agreement is what will be enforced.

Therefore, employers should be very mindful of how the policy is written and should avoid vague, ambiguous, or misleading language. A holiday policy should also cover what happens if an employee works during a paid holiday.

For example, does the employee get double pay for the day, or will the employee get another day off with pay to add to the leave bank? More information on this issue, as well as a sample holiday policy, can be found here: http://www.twc.state.tx.us/news/efte/holiday_policies.html

These basic rules on holiday leave may generate additional questions for employers.

Those employers who seek additional assistance or clarification are encouraged to contact our TWC employer hotline at the number provided at the beginning of this article.

Velissa R. Chapa is Legal Counsel to Texas Workforce Commissioner Ruth R Hughs.