Holiday Pay Laws by State: What Employers Actually Owe

Federal law does not require holiday pay, and Rhode Island is the only state with a broad Sunday-and-holiday premium rule.

For most employers, the first question is not a state-by-state puzzle. It is what you promised: in the handbook, offer letter, union agreement, written policy, or repeated past practice. The Fair Labor Standards Act does not require paid holidays, and it does not require extra pay just because someone worked on a holiday.

Rhode Island is the main state-law exception. R.I. Gen. Laws §25-3-3 requires at least 1.5× the normal rate for work performed on Sundays and designated holidays, subject to statutory exemptions. Massachusetts used to have a similar retail Sunday-and-holiday premium, but Chapter 121 of the Acts of 2018 phased it out. The other 49 states and the District of Columbia generally leave holiday pay to employer policy, contract, or past practice.

The bigger risk is what happens after you choose to pay something. If you announce a holiday bonus and an hourly employee works overtime in that same workweek, the bonus usually has to be included in the regular rate for overtime. Many employers pay the bonus and the usual overtime premium, but miss the extra premium created by the bonus.

Two other layers matter for narrower groups of employers: federal contractor wage determinations under Davis-Bacon and the McNamara-O'Hara Service Contract Act, and religious-holiday accommodation under Title VII after Groff v. DeJoy, 600 U.S. 447 (2023).

Skip to the state-by-state table →

Quick reference

• Federal rule: No required holiday pay. Paid holidays and holiday premiums are usually employer-policy choices.
• Rhode Island: R.I. Gen. Laws §25-3-3 requires at least 1.5× for Sunday and holiday work, with statutory exemptions.
• Massachusetts: The old retail Sunday/holiday premium was phased out under Chapter 121 of the Acts of 2018 and is no longer required.
• Bonus trap: Announced, promised, or expected holiday bonuses can raise the overtime rate for any week where the employee worked over 40 hours.
• Holiday premium credit: A true 1.5× holiday premium can often satisfy both the employer's holiday policy and the FLSA overtime premium for the same hour.
• Federal contractors: Davis-Bacon and Service Contract Act wage determinations can create separate holiday-pay obligations.
• Religious holidays: After Groff v. DeJoy, denying a religious-holiday accommodation requires a substantial business-cost showing, not just minor inconvenience.

The 5 most expensive holiday-pay mistakes

1. Paying a non-discretionary holiday bonus + standard OT premium without recomputing the regular rate. 29 CFR §778.211 brings any announced, expected, or past-practice bonus into the regular rate of the workweek it covers. The mechanic at 29 CFR §778.209(a) is verbatim: "The amount of the bonus is merely added to the other earnings of the employee (except statutory exclusions) and the total divided by total hours worked." A worker at $20/hour who clocks 50 hours in a week that also includes a $500 announced holiday bonus has a new regular rate of $30/hour, not $20. The 0.5× OT premium for the 10 over-40 hours runs $30 × 0.5 × 10 = $150, not $100. The $50 per-worker shortfall scales linearly across the bonused-and-overtime population. Back-wages run through §778.209's apportionment rule when the bonus covers multiple workweeks and §778.303's retroactive-rate-increase recompute when the employer self-corrects late. Recovery reaches two years (three years for willful) under 29 U.S.C. §255(a), doubled by liquidated damages under 29 U.S.C. §216(b), with state extensions in California (four years via Bus. & Prof. Code §17200), Massachusetts (mandatory treble damages under MGL c.149 §150 and MGL c.151 §1B), and New York (six years under NY Lab. Law §198).

2. Labeling a recurring bonus "discretionary" without meeting the §778.211(b) test. The §207(e)(3) exclusion for discretionary bonuses is narrow. 29 CFR §778.211(b) text: "The employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid." Three conjunctive requirements — fact, amount, and timing — and any one failure flips the bonus into §778.211(c)'s non-discretionary bucket. The regulation enumerates the failure modes: "Any bonus which is promised to employees upon hiring or which is the result of collective bargaining would not be excluded from the regular rate ... Most attendance bonuses, individual or group production bonuses, bonuses for quality and accuracy of work, bonuses contingent upon the employee's continuing in employment until the time the payment is to be made and the like are in this category." A handbook clause reading "the Company may, in its sole discretion, pay an annual holiday bonus" does not insulate a bonus paid every December for five consecutive years — past practice creates expectation, expectation defeats discretion, and the bonus folds into the regular rate.

3. Working an SCA employee on a designated holiday without paying both the holiday benefit and the work-time pay. 29 CFR §4.174 governs holiday pay under the McNamara-O'Hara Service Contract Act, which covers federal service contracts over $2,500. The regulation's three operative rules track verbatim: entitlement requires the employee to perform "any work during the workweek in which a named holiday occurs"; the holiday benefit applies "regardless of whether the named holiday falls on a Sunday, another day during the workweek on which the employee is not normally scheduled to work, or on the employee's day off"; and "a full-time employee who works on the day designated as a holiday must be paid, in addition to the amount he ordinarily would be entitled to for that day's work, the cash equivalent of a full-day's pay up to 8 hours or be furnished another day off with pay." Many contractors treat the holiday pay as a substitute for, rather than addition to, the work pay. The penalty under the SCA's enforcement framework is back-wage recovery, restitution, and potential debarment from federal contracting.

4. Denying a religious-holiday accommodation under the pre-2023 Hardison "de minimis" framework. Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977), permitted an employer to deny a religious accommodation by showing "more than a de minimis cost" — a standard satisfied by almost any administrative effort, including a coworker's voluntary shift swap. Groff v. DeJoy, 600 U.S. 447 (2023), unanimously rejected that reading. Verbatim from the slip opinion: "Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business." The replacement standard reaches every religious-holiday accommodation refusal post-June 29, 2023. The EEOC's post-Groff enforcement activity has targeted denials of voluntary shift swaps and refusals to consider floating-holiday substitution; state-level enforcement under analogous statutes (California Government Code §12940, New York Executive Law §296, Illinois 775 ILCS 5/2-102) has applied the Groff "substantial increased costs" framing.

5. Mishandling the §207(e)(6) holiday-premium credit toward weekly overtime. 29 U.S.C. §207(e)(6) excludes from the regular rate "extra compensation provided by a premium rate paid for work by the employee on Saturdays, Sundays, holidays, or regular days of rest ... where such premium rate is not less than one and one-half times the rate established in good faith for like work performed in nonovertime hours on other days." 29 U.S.C. §207(h)(2) then makes that excluded premium creditable: "Extra compensation paid as described in paragraphs (5), (6), and (7) of subsection (e) shall be creditable toward overtime compensation payable pursuant to this section." Two symmetric errors recur. The first is including the holiday-premium portion in the regular rate divisor, which inflates the OT premium on every over-40 hour of the workweek. The second is paying separate OT premium on hours that already earned the holiday premium, double-counting compensation that §207(h)(2) makes interchangeable. The correct outcome is that a single 1.5× rate paid for hours that are both worked on a designated holiday AND over 40 in the workweek satisfies both obligations.

Federal baseline — no general FLSA holiday-pay requirement

29 U.S.C. §207 — what the statute does and doesn't require

29 U.S.C. §207(a)(1) requires that "no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce ... for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." The statute is silent on holidays. No subsection requires paid time off for a holiday; no subsection requires a premium for working on a holiday. The DOL Wage and Hour Division's public FAQ at dol.gov/agencies/whd/faq makes both points expressly: "Extra pay for working weekends or nights is a matter of agreement between the employer and the employee (or the employee's representative). The Fair Labor Standards Act (FLSA) does not require extra pay for weekend or night work." And: "The FLSA does not require payment for time not worked, such as vacations, sick leave or federal or other holidays."

What FLSA does regulate is the regular rate. Holiday payments — whether for time not worked, for time worked at premium, or as a separate bonus — intersect with the regular-rate calculation in three different ways, each with a distinct treatment under 29 U.S.C. §207(e) and 29 CFR Part 778.

Three holiday-payment types, three regular-rate treatments

Situation	Common multiplier	Regular-rate treatment	Source
Holiday off, paid (paid time off)	1× (full day)	Excluded from regular rate	29 U.S.C. §207(e)(2); 29 CFR §778.216
Premium for hours worked on a holiday at ≥1.5×	1.5× or 2×	Premium portion excluded	29 U.S.C. §207(e)(6); creditable under §207(h)(2)
Non-discretionary holiday bonus	Lump sum	Included in regular rate	29 CFR §778.211(c); 29 CFR §778.209(a)
Discretionary holiday bonus (true gift)	Lump sum	Excluded if §211(b) test met	29 U.S.C. §207(e)(1), (e)(3); 29 CFR §778.211(b)

29 U.S.C. §207(e)(2) — pay for time not worked

The statute excludes from the regular rate "payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause." 29 CFR §778.216 implements the exclusion and adds the load-bearing constraint that "no part of such payments can be credited toward overtime compensation due under the Act." Eight hours of holiday pay for an unworked Thanksgiving therefore does two things: it stays out of the regular-rate divisor for that workweek's OT calculation, and it does not offset OT premium owed for any hours actually worked.

29 U.S.C. §207(e)(6) — premium pay for holiday work

The statute excludes "extra compensation provided by a premium rate paid for work by the employee on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh day of the workweek, or for work outside of the hours established in good faith by the contract or agreement as the basic, normal, or regular workday (not exceeding eight hours) or workweek (not exceeding the maximum workweek applicable to such employee under subsection (a))." The exclusion requires the premium rate to be "not less than one and one-half times the rate established in good faith for like work performed in nonovertime hours on other days." Anything below 1.5× — a 1.25× holiday differential, for example — does not qualify for the §207(e)(6) exclusion and folds into the regular-rate divisor.

29 U.S.C. §207(h)(2) — the premium-credit rule

The statute provides verbatim: "Extra compensation paid as described in paragraphs (5), (6), and (7) of subsection (e) shall be creditable toward overtime compensation payable pursuant to this section." The mechanic resolves the apparent double-pay puzzle when the same hour is both worked on a holiday (triggering the employer's policy premium) AND over 40 in the workweek (triggering the FLSA OT premium). A single 1.5× holiday rate on an hour that is also the worker's 41st of the week satisfies both — the premium portion already in the paycheck for the holiday-policy reason credits against the FLSA OT premium otherwise owed. The reverse case — premium below 1.5× — fails both the §207(e)(6) exclusion and the §207(h)(2) credit; the holiday differential then folds into the regular rate AND separate OT premium accrues on hours over 40.

29 CFR §778.211 — the non-discretionary bonus rule

The regulation establishes the §207(e)(3) discretionary-bonus exclusion as a narrow, conjunctive test. 29 CFR §778.211(b) text: "The employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid. The sum, if any, to be paid as a bonus is determined by the employer without prior promise or agreement. The employee has no contract right, express or implied, to any amount." Failure of any prong moves the bonus into the §778.211(c) non-discretionary inclusion regime. The regulation enumerates inclusion triggers: "Any bonus which is promised to employees upon hiring or which is the result of collective bargaining would not be excluded from the regular rate. Bonuses announced to employees to induce them to work more steadily or more rapidly or more efficiently or to remain with the firm are regarded as part of the regular rate of pay. Attendance bonuses, individual or group production bonuses, bonuses for quality and accuracy of work, bonuses contingent upon the employee's continuing in employment until the time the payment is to be made and the like are in this category; in such circumstances they must be included in the regular rate of pay."

The inclusion mechanic at 29 CFR §778.209(a) is also verbatim: "The amount of the bonus is merely added to the other earnings of the employee (except statutory exclusions) and the total divided by total hours worked." The §778.209 multi-week apportionment rule applies when a non-discretionary bonus covers a period longer than one workweek — quarterly attendance bonuses, annual production bonuses — and the regulation permits a "reasonable and equitable" allocation method when actual-hours apportionment is impracticable.

Worked example — the §778.211 trap

Inputs: a worker at $20/hour who works 50 hours in a workweek and receives a $500 holiday bonus announced two months earlier (non-discretionary because the announcement abandoned discretion as to the fact of payment).

Step	Math	Result
Straight-time pay	50h × $20	$1,000
Non-discretionary bonus	(announced)	$500
OT hours	50 − 40	10h
OT premium without recompute	$20 × 0.5 × 10	$100
Naive total (wrong number)	$1,000 + $500 + $100	$1,600
New regular rate	($1,000 + $500) ÷ 50	$30/hour
OT premium at new rate	$30 × 0.5 × 10	$150
Corrected total	$1,000 + $500 + $150	$1,650
Additional OT owed	$150 − $100	$50

The $50 shortfall per worker per bonused-overtime workweek is the canonical recovery shape. Across a 200-person hourly workforce that received a $500 holiday bonus in a single week, that is $10,000 of unpaid OT in one cycle. Across multiple bonus cycles and multiple years within the 29 U.S.C. §255(a) limitations window, doubled by 29 U.S.C. §216(b) liquidated damages, the back-wage exposure compounds.

29 CFR §778.303 — retroactive recompute on rate increases

When an employer retroactively increases a worker's pay rate, the OT premium for the retroactive period must be recomputed at the higher rate. 29 CFR §778.303 makes the same logic explicit for retroactive bonuses: when a bonus is announced after the workweek in which work was performed and is treated as additional remuneration for that period, the regular rate of that workweek is recomputed and additional OT premium is owed on the difference. Payroll systems handle the straight-time retro adjustment routinely; the OT-side recompute is commonly skipped, producing a recurring shape in Wage and Hour Division audits.

2020 Regular Rate Final Rule

85 Fed. Reg. 2014 (Jan. 16, 2020, effective Jan. 15, 2020) updated the §207(e) exclusion regulations for the first time in five decades. The rule clarified that reimbursements for reasonable employee expenses, wellness and gym benefits, certain pay for unused leave, parking benefits, and call-back pay not arranged in advance fit within the §207(e) exclusions. The rule did NOT alter the §778.211 non-discretionary bonus inclusion test — that framework remains intact and was carried forward under successive administrations through 2026. The rule is the most recent material change to the regular-rate exclusion regime.

Federal holiday list — 11 federal holidays after Juneteenth

The current Office of Personnel Management federal holiday set runs 11: New Year's Day, Martin Luther King Jr. Day, Washington's Birthday (Presidents' Day), Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. Juneteenth was added by the Juneteenth National Independence Day Act, Pub. L. No. 117-17, 135 Stat. 287 (June 17, 2021), amending 5 U.S.C. §6103. The federal holiday list controls only the federal civil service and, by reference, the SCA fringe-benefit default; private-sector holiday-pay obligations are governed by the contracts and policies discussed below.

Rhode Island — the one outlier statute

R.I. Gen. Laws §25-3-3 is the single general state holiday-pay requirement in the United States. The operative provision requires that "Work performed by employees on Sundays and holidays must be paid for at least one and one-half (1½) times the normal rate of pay." The statute applies broadly on its face — to employees, not specifically to retail — but exempts several enumerated employer categories whose practical effect is to concentrate the obligation in the retail sector.

Statutory exemptions

The §25-3-3 exemption list runs through several enumerated employer categories, including: manufacturers operating seven days per week; wall-covering manufacturers; certain taxicab and limousine companies; airport car rental agencies; and additional categories listed in the operative provisions. Because most non-retail businesses fall within one of the listed exemptions, the practical scope of the requirement is retail, hospitality, and the residual employer categories not enumerated in the exemption list. Employer-side coverage often frames the statute as a "retail premium pay" rule; the statute's plain text is broader, and the exemption pattern is the operative limit.

Designated holidays

The R.I. designated holidays cross-reference the federal holiday list with one state-specific addition: Victory Day, observed on the second Monday in August. The federal-list holidays (New Year's Day, MLK Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving, Christmas) carry over to the R.I. holiday-pay calculation, joined by Juneteenth following the 2021 amendments referenced below.

2021 amendments

P.L. 2021, ch. 32 and ch. 36, modified §25-3-3. The amendment history is part of the operative statute text and is the most material recent legislative change to the framework. Several pre-2021 grandfathered exemptions remain in effect; the amendments preserved the core 1.5× requirement while updating ancillary provisions.

Practical compliance posture

Rhode Island employers covered by §25-3-3 must:

• Identify whether the employer falls within an enumerated exemption category. The exemption analysis is not optional — defaulting to "we're not retail" is not a defense if the employer doesn't satisfy a specific category.
• Pay at least 1.5× the normal rate for hours worked on Sundays AND on the designated holidays. The premium attaches to the hours, not to the employee's classification.
• Maintain pay records distinguishing Sunday/holiday-rate hours from standard-rate hours. The Rhode Island Department of Labor and Training enforces the requirement through the wage-and-hour complaint process; recordkeeping under standard R.I. wage-and-hour rules is the load-bearing audit dependency.
• Recognize that the §25-3-3 premium feeds into the FLSA regular-rate calculation under §207(e)(6) — at 1.5×, the premium portion is excluded from the regular rate and creditable against weekly OT under §207(h)(2).

Things employers consistently miss

• The exemption list is closed; "not retail" alone is not enough. Employers outside retail commonly assume the statute doesn't apply. The operative exemption list is enumerated; the employer must affirmatively fall within one of the listed categories. Otherwise, the 1.5× requirement attaches.
• Sunday work is treated identically to holiday work. The statute pairs Sundays and holidays as a single rule. Employers focused on the holiday-calendar exposure miss the Sunday-by-Sunday accumulation, which is materially larger across a year.
• The premium is on the normal rate, not on a flat hourly baseline. Non-discretionary bonuses, shift differentials, and other regular-rate components feed into the "normal rate" calculation in the same way they feed into the FLSA regular rate. An employer paying a Sunday premium calculated only on the base hourly rate, ignoring an announced bonus, understates the premium for the same reasons the §778.211 trap exists at the federal level.
• The §207(e)(6) credit is symmetric. When a §25-3-3 Sunday/holiday rate is paid at 1.5× or higher, the premium portion satisfies the federal §207(e)(6) exclusion AND credits against weekly OT under §207(h)(2). Double-counting OT on top of the §25-3-3 premium is the mirror error to ignoring the premium altogether.

Massachusetts — the recent-history datapoint

Massachusetts ran a parallel retail Sunday/holiday premium statute under MGL c.136 §13 and related Blue Laws provisions for decades. The "Grand Bargain" — Chapter 121 of the Acts of 2018, formally titled "An Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax Holiday" — phased the retail premium to zero on a five-year schedule.

Year	Required premium
2018	1.5×
2019	1.4×
2020	1.3×
2021	1.2×
2022	1.1×
2023+	None (eliminated)

Why this matters for the broader framework. Massachusetts is the closest recent analog to the Rhode Island statute, and the legislative trajectory was elimination rather than expansion. No state has adopted a general holiday-pay requirement in the last decade; one state (Massachusetts) phased its requirement to zero. The state-by-state map is mostly empty by design, and the empty cells are not gaps — they are policy choices that delegate holiday-pay terms to the employer-employee relationship.

The substantive default in Massachusetts post-2023 mirrors the rest of the country: holiday pay is purely a matter of employer policy, with the FLSA regular-rate interactions discussed above (§778.211 bonus inclusion, §207(e)(2) PTO exclusion, §207(e)(6)/(h)(2) premium-and-credit) as the binding overlay.

State-by-state table

The table records each state's general statutory holiday-pay treatment. The dominant pattern is "no general requirement" — the substantive content is in the federal regular-rate framework above and the Rhode Island carve-out.

State	General holiday-pay requirement	Notable	Citation
Alabama	None	Federal regular-rate framework only	—
Alaska	None	—	—
Arizona	None	—	—
Arkansas	None	—	—
California	None	Lab. Code §510 governs daily OT; §226.7 break premium intersects holiday-rate hours; Ferra v. Loews Hollywood Hotel, LLC, 11 Cal. 5th 858 (2021), requires "regular rate of compensation" for break premiums	https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=510
Colorado	None	—	—
Connecticut	None	Hotel and restaurant industries: sixth/seventh-day premiums under separate provisions	https://www.cga.ct.gov/current/pub/chap_558.htm
Delaware	None	—	—
District of Columbia	None	DC Code §32-1003 sets standard minimum wage and OT but no holiday-pay requirement	https://code.dccouncil.gov/us/dc/council/code/sections/32-1003
Florida	None	—	—
Georgia	None	—	—
Hawaii	None	—	—
Idaho	None	—	—
Illinois	None	—	—
Indiana	None	—	—
Iowa	None	—	—
Kansas	None	—	—
Kentucky	None	KRS §337.050 7th-consecutive-day premium not holiday-specific	https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=32049
Louisiana	None	—	—
Maine	None	—	—
Maryland	None	—	—
Massachusetts	None (post-2023)	MGL c.136 §13 retail Sunday/holiday premium phased out by Chapter 121 of the Acts of 2018	https://malegislature.gov/Laws/SessionLaws/Acts/2018/Chapter121
Michigan	None	—	—
Minnesota	None	—	—
Mississippi	None	—	—
Missouri	None	—	—
Montana	None	—	—
Nebraska	None	—	—
Nevada	None	—	—
New Hampshire	None	—	—
New Jersey	None	—	—
New Mexico	None	—	—
New York	None	NY Lab. Law §198-c includes holiday pay within the "benefits or wage supplements" enforcement scheme IF the employer has agreed to provide it	https://www.nysenate.gov/legislation/laws/LAB/198-C
North Carolina	None	—	—
North Dakota	None	—	—
Ohio	None	—	—
Oklahoma	None	—	—
Oregon	None	—	—
Pennsylvania	None	—	—
Rhode Island	1.5× for Sunday and designated holiday work	R.I. Gen. Laws §25-3-3; enumerated employer-category exemptions; 2021 amendments under P.L. 2021, ch. 32 and ch. 36	https://webserver.rilegislature.gov/Statutes/TITLE25/25-3/25-3-3.htm
South Carolina	None	—	—
South Dakota	None	—	—
Tennessee	None	—	—
Texas	None	—	—
Utah	None	—	—
Vermont	None	—	—
Virginia	None	—	—
Washington	None	—	—
West Virginia	None	—	—
Wisconsin	None	—	—
Wyoming	None	—	—

The "none" rows are not gaps in the table — they are the substantive content. State holiday-pay laws are a single-row landscape in the United States, and the value-bearing complexity sits in the federal regular-rate framework that applies in all 50 states.

Federal contractor frameworks — Davis-Bacon and the Service Contract Act

Federal contractors face binding holiday-pay obligations that the general FLSA framework doesn't impose. Two statutes layer over the FLSA floor for the contractor subset: the Davis-Bacon Act for federal construction and the McNamara-O'Hara Service Contract Act for federal service work.

Davis-Bacon Act — 40 U.S.C. §§3141-3148; 29 CFR §5.5

Scope: construction, alteration, or repair of public buildings or public works funded by federal contracts exceeding $2,000. Davis-Bacon does not require paid holidays as a baseline. The 29 CFR §5.5 contract-clauses regulation requires contractors to pay the locality's prevailing wage, including any "bona fide fringe benefits" specified in the wage determination. Holiday pay, when included, appears in the locality- and classification-specific wage determination, not in §5.5 itself.

29 CFR §5.5 operative language: "Contributions made or costs reasonably anticipated for bona fide fringe benefits under the Davis-Bacon Act ... on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics." The contractor may "pay the benefit as stated in the wage determination or may pay another bona fide fringe benefit or an hourly cash equivalent thereof." When the wage determination for a specific locality + classification includes holiday pay as a fringe component, the contractor must provide either paid holidays or an hourly cash equivalent.

The 2023 Davis-Bacon Final Rule, "Updating the Davis-Bacon and Related Acts Regulations," 88 Fed. Reg. 57526 (Aug. 23, 2023, effective Oct. 23, 2023), restored the three-step prevailing-wage methodology, strengthened anti-retaliation provisions, and expanded the rule's coverage of trucking activities on covered projects. The rule did not alter the holiday-pay fringe-benefit framework.

McNamara-O'Hara Service Contract Act — 41 U.S.C. §§6701-6707; 29 CFR §4.174

Scope: federal service contracts exceeding $2,500. Covers janitorial services, food service, security guards, IT services on federal property, and broadly any service work performed under a federal service contract. Like Davis-Bacon, the SCA does not impose paid holidays as a free-standing requirement; the wage determination for the locality + occupation typically includes a vacation-and-holiday fringe-benefit specification.

The standard SCA holiday set, when the wage determination includes it, runs the 10 long-standing federal holidays plus Juneteenth: New Year's Day, MLK Day, Washington's Birthday, Memorial Day, Juneteenth, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day. The exact list varies by wage determination; pre-2021 wage determinations may still reference the older 10-holiday list.

The §4.174 holiday-pay framework is verbatim explicit on three rules.

• Entitlement: "an employee who performs any work during the workweek in which a named holiday occurs is entitled to the holiday benefit."
• Non-workday treatment: holiday benefits apply "regardless of whether the named holiday falls on a Sunday, another day during the workweek on which the employee is not normally scheduled to work, or on the employee's day off."
• Working on holiday: "a full-time employee who works on the day designated as a holiday must be paid, in addition to the amount he ordinarily would be entitled to for that day's work, the cash equivalent of a full-day's pay up to 8 hours or be furnished another day off with pay."

The third rule is the compliance trap. SCA employees who work on a paid holiday receive holiday pay PLUS pay for time worked; one is not a substitute for the other. The penalty under the SCA's enforcement framework is back-wage recovery, restitution, and potential debarment from federal contracting for three years.

Title VII religious accommodation — the post-Groff overlay

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., prohibits religious discrimination and imposes a separate duty to provide reasonable accommodation for an employee's "sincerely held religious belief" — including observance of religious holidays not on the employer's standard holiday schedule. The accommodation duty intersects with holiday-pay policy whenever an employee requests time off, schedule modification, or shift-swap accommodation for a religious holiday.

The Hardison to Groff arc

Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977), held that an employer is not required to accommodate an employee's religious practice if doing so would impose "more than a de minimis cost." The de minimis standard governed religious-accommodation analysis for nearly five decades. Under it, employers could often defeat accommodation claims by pointing to almost any cost — a coworker's voluntary shift swap, scheduling administrative effort, even hypothetical impacts on workplace morale.

Groff v. DeJoy, 600 U.S. 447 (2023) (decided June 29, 2023), unanimously rejected the de minimis reading. The Court's verbatim holding: "Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business." The decision did not formally overrule Hardison but clarified that the "more than a de minimis cost" phrase had been read too restrictively; the operative standard going forward is the "substantial increased costs" test grounded in the statute's "undue hardship" text.

Practical impact for holiday pay

Pre-Groff, an employer could often deny a religious-holiday accommodation by pointing to almost any cost — a coworker's voluntary shift swap was sometimes treated as a de minimis burden the employee was not entitled to. Post-Groff, the employer must show a substantial business burden to deny accommodation. Voluntary shift swaps, floating-holiday substitution, and flexible scheduling are no longer presumptively burdensome. The EEOC has not yet issued formal revised guidance, but post-Groff enforcement actions have targeted refusals of voluntary shift swaps, refusals to consider floating-holiday PTO substitution, and required attendance on non-standard religious holidays without accommodation analysis.

State-level enforcement under analogous accommodation statutes — California Government Code §12940 (FEHA), New York Executive Law §296 (HRL), Illinois 775 ILCS 5/2-102 (Human Rights Act) — has applied the Groff "substantial increased costs" framing or stricter state-law equivalents.

Operational implications

• An employee request for a religious-holiday accommodation triggers an individualized analysis. Generic schedule policies do not satisfy the duty.
• Available accommodation options include voluntary shift swaps, floating-holiday substitution from accrued PTO, schedule modification, and unpaid leave. Cost as a defense requires substantial — not minimal — increased business cost.
• Documentation of the accommodation analysis is the load-bearing audit dependency. An employer denying accommodation without documented analysis loses the procedural defense.
• Holiday-pay-policy interactions matter: an employer offering paid holiday time for Christmas but not for Yom Kippur, Eid al-Fitr, or other religious holidays sits in a posture where the PTO-substitution accommodation is the natural and now-presumptively-available remedy.

Industry-specific frameworks

Healthcare and public safety

29 U.S.C. §207(j) permits hospitals and residential care establishments to elect a 14-day work period in lieu of the seven-day workweek, with overtime owed at 1.5× for hours over 8 per workday AND over 80 per 14-day period (independent thresholds). 29 U.S.C. §207(k) permits public agencies to adopt 7-to-28-day work periods for fire-protection (53h per 7 days; 212h per 28 days) and law-enforcement personnel (43h per 7 days; 171h per 28 days) (29 CFR §553.230). Neither election imposes a holiday-pay requirement directly, but the regular-rate calculation for the elected period must incorporate any non-discretionary holiday bonus under the same §778.211 framework. Holiday-pay obligations in both sectors are typically set by collective bargaining or employer policy.

Union sector — collective bargaining baseline

Collective bargaining agreements universally specify holiday pay above the federal floor — typically the 11 federal holidays per the current OPM list (often supplemented with the Day after Thanksgiving, Christmas Eve, New Year's Eve, and floating days) at 1.5× for hours worked on a designated holiday (2× common in heavy industry and major-holiday work). CBAs typically do not waive the §207(h)(2) credit, so the contract holiday rate also satisfies the FLSA OT premium for hours that are both worked on a holiday AND over 40 in the workweek. Floating holidays and PTO substitution for religious observances are increasingly common post-Groff.

Multi-state and remote workers

Holiday-pay obligations under the Rhode Island statute and the federal regular-rate framework follow the employee's work location, not the employer's headquarters or the employee's residence. The same work-location principle applies to overtime, breaks, and the rest of the FLSA-plus-state-law overlay.

Concrete scenarios.

• A Texas-headquartered company with a remote employee in Rhode Island who works occasional Sundays from a home office: §25-3-3 applies to the Rhode Island work hours unless the employer affirmatively falls within an enumerated exemption. The premium attaches to the work, not the employer's domicile.
• A Florida-based company that staffs an SCA service contract performed on federal property in Maryland: the §4.174 holiday-pay framework applies to the contract employees, governed by the wage determination for the locality + occupation.
• A Massachusetts-headquartered retailer operating across all New England states: Rhode Island Sunday/holiday work continues to require §25-3-3 premium pay even though Massachusetts eliminated its parallel requirement effective 2023. The state-by-state divergence is operational, not headquartered.
• An employee working in multiple states during the same workweek: the holiday-pay analysis runs per work-location-and-hour. A worker who performs 30 hours in Rhode Island (8 of them on a designated holiday) and 20 hours in Massachusetts within the same workweek owes Rhode Island the §25-3-3 premium for the 8 Rhode Island holiday hours, and the federal regular-rate framework governs the rest.

The compliance implication is identical to the multi-state pattern across the wage-and-hour cluster: work-location-aware time records are the load-bearing recordkeeping primitive. Time systems that capture only hours-per-week without per-day work location can't anchor a defensible §25-3-3 analysis or a §778.211 regular-rate recompute when a multi-state worker receives a non-discretionary holiday bonus.

Recent changes (2024-2026)

• June 29, 2023 — Groff v. DeJoy, 600 U.S. 447 (2023). Supreme Court unanimously replaced the Hardison "more than a de minimis cost" standard with the "substantial increased costs in relation to the conduct of its particular business" test for Title VII religious-accommodation analysis. The decision reaches every religious-holiday accommodation denial post-decision and has been incorporated by the EEOC into enforcement priorities.
• October 23, 2023 — 2023 Davis-Bacon Final Rule, 88 Fed. Reg. 57526 (Aug. 23, 2023). Effective date for the rule that restored the three-step prevailing-wage methodology, strengthened anti-retaliation provisions, and expanded trucking-activity coverage on Davis-Bacon projects. The rule did not alter the holiday-pay fringe-benefit framework but is the most recent material Davis-Bacon update.
• 2024 — EEOC religious-accommodation enforcement activity. The EEOC has filed and resolved multiple post-Groff religious-accommodation matters since 2023, signaling enforcement priorities around denial of voluntary shift swaps, refusal to consider PTO substitution for religious holidays, and required attendance on non-standard religious holidays without documented accommodation analysis. State-level enforcement under analogous statutes (CA FEHA, NY HRL, IL Human Rights Act) has applied Groff's framing.
• Rhode Island enforcement. The Rhode Island Department of Labor and Training publishes the state legal-holiday list and enforces the Sunday-and-holiday premium rule. For employers, the practical update is not a new calculation; it is to check the current statute and exemptions before assuming a Rhode Island location is covered or exempt.
• 2024-2026 — Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (2022); S277518 (Cal.) review granted. Pending at the California Supreme Court as of mid-2026. The "every minute paid" rule under California Labor Code §§510, 226, and 1194 would extend to holiday-rate hours captured at the minute level if Camp is affirmed — the no-rounding-when-exact-time-is-captured principle does not carve out holiday work. See research:time-clock-rounding-rules for the full posture.

FAQ

Does federal law require any holiday pay?

No. 29 U.S.C. §207 contains no provision requiring paid holidays as time off or premium pay for working on a holiday. The DOL Wage and Hour Division's public FAQ confirms verbatim: "The FLSA does not require payment for time not worked, such as vacations, sick leave or federal or other holidays."

What is the §778.211 holiday-bonus trap?

29 CFR §778.211 brings non-discretionary bonuses into the regular rate of the workweek they cover. When an announced or expected holiday bonus lands in a week with over-40 hours, the bonus is added to straight-time earnings, the total is divided by total hours worked under 29 CFR §778.209(a), and the 0.5× OT premium is recomputed at the new regular rate. The canonical worked example — 50 hours × $20 + $500 announced bonus — yields a $30/hour regular rate and $150 of OT premium for the 10 over-40 hours, versus the naive $100 that ignores the bonus. The $50 shortfall per worker per bonused-overtime week is the recoverable shape.

Which state has a general holiday-pay law?

Rhode Island. R.I. Gen. Laws §25-3-3 requires at least 1.5× the normal rate for hours worked on Sundays and designated holidays, subject to enumerated employer-category exemptions whose practical effect concentrates the obligation in the retail sector. No other state has a general holiday-pay statute as of May 2026.

What happened to the Massachusetts retail Sunday/holiday premium?

Chapter 121 of the Acts of 2018 ("Grand Bargain") phased the retail premium from 1.5× in 2018 to zero in 2023 (1.4× in 2019, 1.3× in 2020, 1.2× in 2021, 1.1× in 2022, eliminated thereafter). Massachusetts is the recent-history datapoint that illustrates the trajectory of state holiday-pay statutes — elimination rather than expansion.

How does the §207(h)(2) holiday-premium credit work?

29 U.S.C. §207(h)(2) makes the §207(e)(5)/(6)/(7) premium portion "creditable toward overtime compensation payable pursuant to this section." When an hour is worked on a designated holiday (triggering the employer's policy premium) AND over 40 in the workweek (triggering the FLSA OT premium), a single 1.5× rate satisfies both obligations. The premium portion already in the paycheck for the holiday-policy reason credits against the FLSA OT premium otherwise owed for that hour.

What is the discretionary-bonus test under §778.211(b)?

The test is conjunctive: the employer must retain discretion both as to the fact of payment AND as to the amount, and the decision must be made "quite close to the end of the period for which the bonus is paid" (29 CFR §778.211(b)). Any one failure flips the bonus into the §778.211(c) non-discretionary inclusion bucket. Announced, expected, attendance-based, production-based, contractual, and past-practice-anchored bonuses all fail the test and must be included in the regular rate.

What does the Service Contract Act require for holiday pay on a federal contract?

29 CFR §4.174 governs SCA holiday pay. Three rules: an employee who performs any work in the workweek a named holiday occurs is entitled to the holiday benefit; the benefit applies regardless of whether the holiday falls on the employee's normal workday; and a full-time employee who works on a designated holiday must be paid both the holiday benefit AND the work-time pay (not one in lieu of the other). The standard SCA holiday set runs 11 holidays per the current federal list; the specific holiday list and benefit value are set by the wage determination for the locality + occupation.

What did Groff v. DeJoy change about religious-holiday accommodation?

Groff v. DeJoy, 600 U.S. 447 (2023), replaced the Hardison (1977) "more than a de minimis cost" standard with the "substantial increased costs in relation to the conduct of its particular business" test. The change reaches every Title VII religious-accommodation denial post-June 29, 2023, including denials of voluntary shift swaps, refusals to consider PTO substitution for religious holidays, and required attendance on non-standard religious holidays without accommodation analysis. Employers must now show substantial business burden, not minimal cost, to defeat an accommodation request.

If you discover you've been doing this wrong

1. Identify the affected population and limitations window. Federal back-wages reach two years; three years for willful violations (29 U.S.C. §255(a)). Liquidated damages double the recovery (29 U.S.C. §216(b)). California's UCL window under Bus. & Prof. Code §17200 extends to four years; New York reaches six years under NY Lab. Law §198; Massachusetts requires mandatory treble damages within the three-year window under MGL c.149 §150 and MGL c.151 §1B. The §778.211 bonus-recompute issue is the most common shape; the §207(e)(6) credit misapplication is the second most common.
2. Reconstruct the records. Pull payroll data, schedule data, time-clock records, bonus-announcement communications, handbook versions, and any auxiliary scheduling systems. The 29 CFR §516.2(a) recordkeeping obligation applies; the absence of records shifts the burden under Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946). Bonus-announcement timing matters — the announcement date determines whether the bonus was discretionary as of the workweek it covered.
3. Compute back-wages owed per the relevant mechanic. For §778.211 errors, recompute the regular rate workweek-by-workweek by adding the bonus to straight-time earnings under 29 CFR §778.209(a) and recomputing the 0.5× OT premium. For multi-week bonuses, apportion under §778.209's allocation rule. For §207(h)(2) credit errors, recompute the OT premium with the holiday-premium portion appropriately credited against weekly OT for hours that overlap. For SCA §4.174 work-on-holiday errors, recompute pay-on-top-of-benefit for each affected day. Document each step.
4. Decide on voluntary payment posture. Voluntary payment under DOL supervision (the PAID program or a Wage and Hour Division-supervised settlement) can resolve the federal claim with a release; voluntary payment outside supervision does not waive the employee's rights to liquidated damages or attorneys' fees under 29 U.S.C. §216(b). State-law claims have separate release mechanics — California requires Labor Commissioner or court approval for valid wage releases. SCA back-wages have their own supervised-settlement framework through the Wage and Hour Division.
5. Consult counsel before any payment exceeding the per-worker class-action threshold. The $5,000-$10,000 per-worker mark is the practical threshold for class-action exposure under FRCP Rule 23 or §216(b) collective-action procedures. Below it, individual settlements; above it, class-mechanics counsel is the load-bearing dependency. For SCA matters, debarment exposure (up to three years from federal contracting) is a separate dimension to factor into the resolution posture.

The bottom line

State holiday-pay laws are a single-row map: Rhode Island under §25-3-3, every other jurisdiction silent. The substantive content is in the federal regular-rate framework — the §207(e)(2) PTO exclusion, the §207(e)(6) premium exclusion with its §207(h)(2) credit, and the §778.211 non-discretionary bonus inclusion that most payroll systems quietly miss. Above that floor sit two binding overlays: the Davis-Bacon and SCA contractor frameworks, where 29 CFR §4.174 obligates pay-on-top-of-benefit for work performed on a designated holiday; and the post-Groff Title VII religious-accommodation duty, where the "substantial increased costs" test now governs every refused religious-holiday accommodation.

The structural failure modes recur. Announced bonuses misclassified as discretionary. The §778.211 recompute skipped. The §207(e)(6) credit double-counted or ignored. The §4.174 work-on-holiday rule treated as either-or instead of both. Religious-holiday accommodation denied under the old Hardison framework. Each compounds across the limitations window, doubles under liquidated damages, and reaches further under state UCL or treble-damages statutes.

The highest-leverage operational discipline is the recordkeeping primitive at 29 CFR §516.2 plus the regular-rate math at 29 CFR §778.209. Workweek-anchored, location-aware, bonus-aware time records produce a defensible §778.211 recompute and a defensible §207(h)(2) credit on holiday-rate hours. The state map is mostly empty; the federal math is mostly missed.

Sources

Federal statutes

• 29 U.S.C. §207 — Maximum hours, overtime, regular-rate exclusions, premium credit: https://www.law.cornell.edu/uscode/text/29/207
• 29 U.S.C. §216 — Penalties and damages: https://www.law.cornell.edu/uscode/text/29/216
• 29 U.S.C. §255 — Statute of limitations: https://www.law.cornell.edu/uscode/text/29/255
• 40 U.S.C. §§3141-3148 — Davis-Bacon Act: https://www.law.cornell.edu/uscode/text/40/chapter-31/subchapter-IV
• 41 U.S.C. §§6701-6707 — McNamara-O'Hara Service Contract Act: https://www.law.cornell.edu/uscode/text/41/subtitle-II/chapter-67
• 42 U.S.C. §2000e — Title VII of the Civil Rights Act of 1964: https://www.law.cornell.edu/uscode/text/42/2000e
• 5 U.S.C. §6103 — Federal holidays: https://www.law.cornell.edu/uscode/text/5/6103
• Pub. L. No. 117-17 — Juneteenth National Independence Day Act (June 17, 2021): https://www.congress.gov/bill/117th-congress/senate-bill/475

Federal regulations

• 29 CFR §778.211 — Discretionary bonus test: https://www.law.cornell.edu/cfr/text/29/778.211
• 29 CFR §778.209 — Bonus apportionment: https://www.law.cornell.edu/cfr/text/29/778.209
• 29 CFR §778.216 — Payments for occasional periods of no work: https://www.law.cornell.edu/cfr/text/29/778.216
• 29 CFR §778.303 — Retroactive pay increases: https://www.law.cornell.edu/cfr/text/29/778.303
• 29 CFR §4.174 — Service Contract Act holidays: https://www.law.cornell.edu/cfr/text/29/4.174
• 29 CFR §5.5 — Davis-Bacon contract clauses: https://www.law.cornell.edu/cfr/text/29/5.5
• 29 CFR §516.2 — Recordkeeping: https://www.law.cornell.edu/cfr/text/29/516.2
• 29 CFR §553.230 — Section 7(k) work periods: https://www.law.cornell.edu/cfr/text/29/553.230

Federal rulemakings

• 2020 Regular Rate Final Rule, 85 Fed. Reg. 2014 (Jan. 16, 2020): https://www.federalregister.gov/documents/2020/01/16/2019-28167/regular-rate-under-the-fair-labor-standards-act
• 2023 Davis-Bacon Final Rule, 88 Fed. Reg. 57526 (Aug. 23, 2023): https://www.federalregister.gov/documents/2023/08/23/2023-17221/updating-the-davis-bacon-and-related-acts-regulations

DOL guidance

• DOL Wage and Hour Division FAQ: https://www.dol.gov/agencies/whd/faq
• DOL Fact Sheet #23 — Overtime pay under FLSA: https://www.dol.gov/agencies/whd/fact-sheets/23-flsa-overtime-pay
• DOL Fact Sheet #56A — Regular rate of pay under FLSA: https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-rate
• DOL Fact Sheet #56C — Bonuses under the FLSA: https://www.dol.gov/agencies/whd/fact-sheets/56c-bonuses
• DOL Wage and Hour Division — Davis-Bacon and Related Acts: https://www.dol.gov/agencies/whd/government-contracts/construction
• DOL Wage and Hour Division — Service Contract Act: https://www.dol.gov/agencies/whd/government-contracts/service-contracts

Case law

• Groff v. DeJoy, 600 U.S. 447 (2023): https://supreme.justia.com/cases/federal/us/600/447/
• Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977): https://supreme.justia.com/cases/federal/us/432/63/
• Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946): https://www.law.cornell.edu/supremecourt/text/328/680
• Ferra v. Loews Hollywood Hotel, LLC, 11 Cal. 5th 858 (2021): https://law.justia.com/cases/california/supreme-court/2021/s259172.html
• Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (2022); review granted, S277518 (Cal.): https://caselaw.findlaw.com/court/ca-court-of-appeal/1972308.html

State authorities

• Rhode Island General Laws §25-3-3 — Sunday and holiday work: https://webserver.rilegislature.gov/Statutes/TITLE25/25-3/25-3-3.htm
• Massachusetts Chapter 121 of the Acts of 2018 — "Grand Bargain": https://malegislature.gov/Laws/SessionLaws/Acts/2018/Chapter121
• Massachusetts General Laws c.136 §13 — Sunday and holiday work (Blue Laws): https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter136/Section13
• California Labor Code §510 — Overtime: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=510
• California Labor Code §226.7 — Meal and rest period premium: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=226.7
• California Government Code §12940 — FEHA religious accommodation: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV&sectionNum=12940
• New York Labor Law §198-c — Benefits or wage supplements: https://www.nysenate.gov/legislation/laws/LAB/198-C
• New York Executive Law §296 — Human Rights Law: https://www.nysenate.gov/legislation/laws/EXC/296
• DC Code §32-1003 — Minimum wage and overtime: https://code.dccouncil.gov/us/dc/council/code/sections/32-1003
• Kentucky Revised Statutes §337.050 — Seventh-day premium: https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=32049
• Illinois 775 ILCS 5/2-102 — Human Rights Act: https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=077500050HArt%2E+2&ActID=2266