HR Solutions: Holidays

If employees work on a holiday, must the company give them another day off?

The federal Fair Labor Standards Act doesn’t require employers to provide additional pay or another day off to employees who work on a holiday.

However, some federal contractors may be required to do so under the McNamara-O’Hara Service Contract Act and the Davis-Bacon Act and related acts, which apply to construction contractors. Some employers also may be obligated to provide holiday benefits under state law or collective bargaining agreements. If not, holiday benefits may be provided at the employer’s discretion.

To encourage employees to work on a holiday, many employers pay nonexempt employees one and a half times their regular rate of pay for holiday hours worked. Exempt employees typically have a guaranteed salary regardless of the number of days or hours worked. However, an employer may provide them with additional compensation for holiday work without jeopardizing their exempt status.

If an employer elects to provide employees with another paid day off for working on a holiday, it is up to the employer to decide whether the day must be taken during the same workweek, pay period, month or quarter. Consider staffing and administrative issues when making that decision. Allowing the paid day off to be taken within a longer time period could result in tracking issues or in employees forgetting to take the day off and forfeiting it.

Whatever the decision, employers should have clear policies outlining the conditions of holiday benefits. For example, employers should address the following questions:

• Who will be eligible?
• How will an employee be paid for working on a holiday?
• What happens when an employee is scheduled to be off on a holiday?
• If another paid day off is provided, when can it be taken and when would it be forfeited?
• What happens if an employee calls out of work on a scheduled holiday?
• How are holidays handled when an employee works a compressed workweek or is on leave?
• Will employees be required to work the day before and the day after the holiday to be eligible for special pay or another paid day off?

Employers should ensure that policies comply with federal and state laws, employment contracts, and collective bargaining agreements.

—Amber Clayton, SPHR-CA

What are an employer’s options when an employee resigns while on FMLA leave?

Under Family and Medical Leave Act (FMLA) regulations, employers are required to maintain an eligible employee’s coverage under any group health plan while the employee is on leave. In addition, employees on FMLA leave are entitled to reinstatement after they complete their protected leave.

After the employee has submitted a letter of resignation or some other formal notice of his intent not to return to work, FMLA regulations state that the employer is no longer required to maintain health benefits (subject to COBRA requirements) or to reinstate the employee.

The employer’s obligations continue, however, if the employee indicates that he may be unable to return to work but expresses a continuing desire to do so.

Employers must take steps to effectively follow the regulatory provisions of Section 825.311 of the FMLA when an employee goes on leave. First, the employer’s notice of rights and responsibilities should clearly advise the employee that periodic reports of his status and intent to return to work will be required.

The notice should also clearly outline any requirements for the employee to make health benefits premium payments during the leave. Finally, it should inform the employee of his potential obligation to pay health insurance premiums currently paid by the employer if the employee fails to return to work at the leave’s end.

By including this information in the notice, an employer establishes an expectation of ongoing communication. This helps ensure that HR receives timely notice of the employee’s intentions and makes clear the employer’s intention to pursue the recovery of its share of health plan premiums paid during any period of unpaid FMLA leave if the employee doesn’t return to work.

If at any time during the leave the employee advises the employer that he doesn’t intend to return to work, he should be required to submit a letter of resignation or other formal documentation before the employer initiates the termination of employment and benefits.

The majority of employees take FMLA leave intending to return to work, but plans can change. Required periodic updates can help an employer to avoid employment gaps and to reduce benefits expenditures when employees choose not to return.

—Edward Yost, SPHR-CA