Holiday Pay for Exempt Employees Depends on Employer’s Policy

Labor Law Corner

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herman_gary_SMDoes an exempt employee have to be paid for a holiday for which the employer closes?

Perhaps.

California law does not require an employer to pay anything for holidays, when the employer is closed. Anything paid beyond an employee’s regular rate for work on a holiday is not required by law and is governed only by an employer’s policy.

The salary basis test for an exempt employee requires that the employee must receive payment of his/her salary for any day that the employee otherwise makes him/herself available to work and the employer chooses for the exempt employee not to work.

In the case of a holiday closure, it is the employer’s choice for the exempt employee not to work, and therefore the employee is due his/her prorated salary for that day.

This would not be the case for closures of a full workweek or more.

Employers should be aware, however, that if there is a deduction from the employee’s salary for a week, which reduces the employee’s salary below the minimum requirements of the law, the exempt status of that employee may be jeopardized for that pay period.


The Labor Law Helpline is a service to California Chamber of Commerce preferred and executive members. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at www.hrcalifornia.com.

Staff Contact: Gary Hermann

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Gary Hermann
About Gary Hermann
Gary Hermann joined the CalChamber in 2004 as an HR adviser. He previously worked for the Division of Labor Standards Enforcement for 26 years as a hearing officer, senior deputy labor commissioner and regional manager. His experience included processing wage claims, conducting investigations, staff development training and supervising 100 employees in nine district offices. He holds a J.D. from the University of Oregon.