Whether holidays are included in PTO depends on how your employer builds its leave program: some employers pool holidays, vacation, and sick time into a single PTO bank that shrinks every time the office closes, while others keep paid holidays in a separate column that never touches your vacation balance. No federal law forces either choice, and no federal law requires paid holidays at all.1U.S. Department of Labor. Handy Reference Guide to the Fair Labor Standards Act The answer for your job lives in your handbook or employment contract, not in statute.
Combined PTO Banks Deduct Holidays From Your Balance
A growing number of employers use a single pool. Vacation, sick days, personal days, and holidays all draw from the same balance. If the office closes for Labor Day, eight hours come out of your PTO bank to cover the day. You get paid, but your remaining hours drop.
The appeal is simplicity. One number tells you where you stand. The catch is that every office closure eats into the same pot you’d use for a vacation or a sick child. A plan advertising 15 days looks generous until six of them are consumed by closures you didn’t pick. Some employers offset this by loading combined plans with more total days, but the math only works if you actually track what the calendar takes.
Separate Holiday Plans Leave Vacation Untouched
The older model keeps holidays and vacation in different columns. The employer designates a set of paid holidays, and those days don’t reduce your vacation balance. Workers who received paid holidays in 2018 averaged eight per year.2U.S. Bureau of Labor Statistics. Holiday Profiles If your plan gives you 10 vacation days and 8 paid holidays under this structure, all 10 vacation days remain yours to schedule.
The trade-off is that employers running separate systems sometimes offer fewer vacation days overall, because they’re already absorbing the cost of paid holidays on top.
Your Handbook Is the Real Answer
Because the Fair Labor Standards Act says nothing about holiday pay, the Department of Labor treats it as “a matter of agreement between an employer and an employee (or the employee’s representative).”3U.S. Department of Labor. Holiday Pay Your employment contract, offer letter, or employee handbook is the document that actually decides whether holidays reduce your PTO. It should specify which dates are observed, whether the day off is supplemental or deducted from your balance, and what happens if you’re asked to work on a designated holiday.
Unionized workers often have more detail written into collective bargaining agreements, which may lock in specific holidays, guarantee premium rates for holiday shifts, and include floating holidays. A union can file a grievance if the employer violates those terms.3U.S. Department of Labor. Holiday Pay Read the “Benefits” or “Leave” section of your handbook at least once a year, especially after acquisitions or policy updates.
Federal Employees Get Holidays On Top of Leave
Federal government workers are the group with holidays guaranteed by statute. Federal law designates 11 paid holidays per year:4U.S. Office of Personnel Management. Federal Holidays
- New Year’s Day
- Birthday of Martin Luther King, Jr.
- Washington’s Birthday
- Memorial Day
- Juneteenth National Independence Day
- Independence Day
- Labor Day
- Columbus Day
- Veterans Day
- Thanksgiving Day
- Christmas Day
These holidays come on top of a federal employee’s annual leave accrual and do not reduce vacation balances. Inauguration Day is also a paid holiday in certain years for federal employees working in the Washington, D.C., area.5GovInfo. 5 USC 6103 – Holidays Private employers often borrow this list as a starting point, but they can pick fewer, more, or completely different dates.
Part-Time and Temporary Workers May Get Nothing
Since no federal law requires holiday pay for anyone, employers have complete discretion to exclude part-time staff, and many do. Employers who include part-timers often prorate the benefit by scheduled hours, so a 20-hour worker might receive four hours of holiday pay instead of eight.
Government contractors are an exception. Under the McNamara-O’Hara Service Contract Act, contracts exceeding $2,500 may include holiday and vacation benefit requirements specified in the wage determination, which can extend to covered workers regardless of full-time or part-time status.3U.S. Department of Labor. Holiday Pay If you’re working on a federal service contract, that wage determination controls your holiday benefits.
Working the Holiday Doesn’t Automatically Mean Extra Pay
One of the most persistent misconceptions in employment law is that working on a holiday entitles you to time-and-a-half. It doesn’t. The FLSA does not require premium pay for holiday work.3U.S. Department of Labor. Holiday Pay If your employer schedules you on the Fourth of July and pays your regular hourly rate, that’s legal under federal law.
Many employers do offer a premium, commonly 1.5 or 2 times the normal rate, because it’s an effective way to get people to volunteer for unpopular shifts. But that premium is contractual, not statutory. If your offer letter or union contract doesn’t mention it, you aren’t owed any.
Salaried Exempt Employees Keep Their Pay When the Office Closes
Exempt salaried employees have a specific protection worth knowing. If your employer closes the office for a holiday and you have no PTO remaining, the employer generally cannot dock your pay for that day. An employer may not make deductions from an exempt employee’s salary for absences caused by the employer or the operating requirements of the business.6U.S. Department of Labor. FLSA Overtime Security Advisor – Compensation Requirements An office closure on Thanksgiving is the employer’s decision, so your paycheck stays whole.
The employer can require you to use available PTO to cover the closure. Once the bank hits zero, though, salary deductions stop being an option. Employers who improperly dock exempt workers risk reclassifying them as non-exempt and triggering back overtime obligations.
Holidays During FMLA Leave
If a paid holiday falls during your FMLA leave, whether you get paid for it depends on how your employer treats holidays for employees on other comparable forms of leave.7U.S. Department of Labor. FMLA Advisor – Maintenance of Employee Benefits If the company pays holiday pay to employees on other unpaid leaves, it must do the same for workers on FMLA leave.
Your employer can also require you to use accrued PTO concurrently with FMLA leave.8U.S. Department of Labor. FMLA Frequently Asked Questions If PTO substitution is mandated and a holiday falls during that stretch, the holiday can come out of your PTO bank under a combined system just as it would if you were working. The leave remains FMLA-protected either way.
Payout Rules When You Leave the Job
Where state law gets involved is at the exit. A handful of states treat accrued, unused PTO as earned wages, meaning your employer must pay it out when you separate. If your PTO bank includes holiday hours under a combined system, those hours carry a dollar value the employer can’t erase from the books.
The rules vary widely. California, Colorado, and Nebraska prohibit use-it-or-lose-it vacation policies entirely, so unused time must either roll over or be paid out. Illinois and Massachusetts require payout at termination but allow employers to cap accrual during employment. A majority of states don’t address the issue by statute, leaving it to the employer’s written policy. In those states, if the handbook says unused PTO is forfeited at separation, that’s typically enforceable.
The practical takeaway: read your PTO policy and check your state’s rule. In states that classify accrued leave as wages, failing to pay out that balance at termination can expose the employer to penalties, and every holiday that reduced your combined balance was money you earned.
Religious Observances Outside the Company Calendar
Standard holiday calendars cluster around the same handful of dates. If your religious observances fall outside that calendar, Title VII of the Civil Rights Act requires your employer to make a reasonable accommodation unless doing so would impose a substantial burden on the business.9U.S. Equal Employment Opportunity Commission. Fact Sheet: Religious Accommodations in the Workplace The Supreme Court’s 2023 decision in Groff v. DeJoy raised the bar for what counts as undue hardship, holding that an employer must show substantial increased costs in relation to the conduct of its particular business.10Supreme Court of the United States. Groff v. DeJoy, 600 U.S. 447 (2023)
The most common accommodation is a schedule swap or flexible shift arrangement. Telling your manager that you need a particular day off for religious reasons triggers the employer’s duty to engage in the process. Coworker complaints or customer preferences don’t count as undue hardship.9U.S. Equal Employment Opportunity Commission. Fact Sheet: Religious Accommodations in the Workplace Whether the accommodated day is paid, unpaid, or drawn from your PTO still comes back to the same handbook question that governs every other day off.