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What is Holiday Pay?

By Bethany Keene
Updated May 17, 2024
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Holiday pay refers to wages an employee receives even when he or she is not at work. Holiday pay does not necessarily refer to an actual calendar holiday, such as Christmas, Hanukkah, or Easter, for instance, though it often does. This type of paid day off is just one benefit that is frequently offered to employees to show appreciation for their hard work, and to acknowledge the fact that their lives outside of work are important as well.

Other types of holiday pay may include maternity leave with pay, sick time, personal time, or vacation time. Generally these types of paid time off are referred to by their specific names, but they are technically a type of holiday pay, during which an employee may take as little time as half a day off, up to a few months with pay, as in the case of maternity leave. Each company may have different rules and requirements in order to qualify for this paid time off, so it is important to research this ahead of time.

In general, holiday pay received for actual holidays does not need to be scheduled with the company ahead of time, because everyone who works for the business will be off that day. The hours will typically just be included in one's paycheck as if that day was worked, like any other day. Sick time or personal time are generally not scheduled in advance either; these types of paid days off are designed to allow employees the opportunity to take the day off at the last minute if one falls ill or a family emergency arises.

Vacation time must generally be scheduled in advance, and it is typically considered good form to consider the other people with whom one works who might also want some time off. While sick time and personal time generally last only a day or two, one might take vacation time for a week or two. Any questions regarding time off should be addressed to the human resources department at your company, particularly with regards to extended time off, such as for a serious illness, during which time certain laws may apply.

Some companies also allow employees to cash out their holiday pay if they do not take days off. For instance, if one has seven vacation days saved up, and does not use them, he or she may be able to receive a payout for those days. Most companies require employees to work for the company for six months to one year before accruing any paid time off, so keep this in mind as well.

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Discussion Comments

By Markerrag — On Feb 07, 2014

It seems almost random the way companies deal with holiday pay. Some divide sick days and holidays, allowing only so many of each. Others give employees a lump sum of paid days off, allowing them to mix them up as they want for vacations, holidays or personal days.

Finding out up front what a company's policies are and how those days accrue is a great idea. Finding out the exact number of paid "calendar" days an employee is granted is good, too. For example, most companies give Thanksgiving day off with pay, but what about the day after? How about New Year's Eve? A company with generous paid time off benefits is in a great position to retain employees and attract new ones.

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