Questions regarding overtime, holiday pay and seasonal hiring often arise this time of year. Here are the eight simple rules you need to know to make this holiday season run smoothly.
Holiday pay rules
Thanksgiving always falls on a Thursday, and this winter, so do Christmas and New Year’s Day. That means many companies will be offering three Fridays off to make three four-day weekends. If your business decides to close on those days, you may, but aren’t required to, pay employees for that time.
Rule No. 1: The Fair Labor Standards Act (FLSA) doesn’t mandate that employees be paid for holidays.
So nonexempts who normally work 10-hour days can be paid for eight holiday hours.
Rule No. 2: If nonexempts receive holiday pay and they also work overtime during a holiday week, don’t factor the holiday pay into their regular rate calculation as you figure their overtime rates. Holiday pay is idle time pay, which is excluded from the regular rate calculation.
Rule No. 3: If you close for a holiday, and you have a bona fide benefits plan, you can require exempts to take accrued time off, provided they receive payments equal to their guaranteed salary. Note: Exempts who have run out of accrued time must still be paid their full salaries.
Rule No. 4: If you shut down for the week, you needn’t pay exempts anything. Exempts don’t need to be paid if they don’t work for a week. They may use vacation time, if they have it.
Holiday work rules
Businesses that are open must pay their employees. But you can save on overtime liability by making some changes to your pay policies. Consider Rules No. 5 and No. 6:
Rule No. 5: You don’t have to include holiday pay in the regular rate calculation for nonexempts who work through a holiday if they receive their regular wages in addition to the holiday pay. But you can’t credit this holiday pay against your obligation to pay overtime.
Rule No. 6: If, instead of paying employees their normal wages plus holiday pay, they exchange the holiday pay for at least time-and-a-half for holiday work, you can credit that time-and-a-half premium against your obligation to pay overtime.
Example: Harry earns $10 an hour. He’s entitled to Christmas Day as a paid day off.
Option 1: He gives up his holiday and works nine hours. During the week he works 50 hours. Total pay: $630: $400 in straight-time pay, $150 in overtime and $80 in holiday pay.
Option 2: Harry gets double time for the holiday. Total pay for working nine holiday hours: $180. He still receives $400 in straight-time pay and $15 for one OT hour. Total pay: $595. Harry’s employer credits the nine hours of OT pay against the 10 hours of OT he’s owed.
Holiday hiring rules
Remember, temporary seasonal employees are still employees, even if they won’t be on your payroll for very long.
Rule No. 7: Temporary employees must complete W-4 and I-9 forms, be reported to the state as new hires and receive W-2s. Tips: Ask to see their Social Security cards and photocopy them for your records. Use the Social Security Administration’s Social Security Number Verification Service to ensure that their names and Social Security numbers match.
Rule No. 8: Finally, temps who consent may be enrolled in your direct deposit or paycard program; provide them with appropriate explanatory material.
Holiday scheduling: How to keep the peace
You need a certain number of employees to work during the holidays, even on Christmas and New Year’s. But, so far, your supervisors aren’t getting many volunteers, and more vacation requests are coming in than you can approve.
What to do? Can you force employees to work certain days? Maybe, but that could trigger a religious-bias lawsuit.
Federal law says you must make a reasonable effort to accommodate employees’ “sincere” religious beliefs, including trying to give them time off for religious observances.
The best way to minimize scheduling disputes, especially around religious holidays, and avoid legal trouble is through a few smart preventative measures:
1. Make clear to applicants and new hires that they may need to work holidays or Sundays, or even overtime hours.
2. Start planning early. Some employers start planning for the holiday season in January, asking employees their preferences about holidays they’d be willing to work, noting who has seniority status and who worked on holidays the previous year.
3. Consider seniority and previous holiday service. Some employers rely strictly on seniority when deciding who gets first choice for time off; others keep track of who worked previous holidays. Both ways have the advantage of letting employees know what to expect, plus it leaves less room for favoritism accusa-tions.
4. Let money do the talking. You’re not required to pay employees a higher rate just because they work on holidays. But holiday-pay bonuses can help fill the schedule and satisfy those irked by having to work a holiday.
5. Spread the burden. Call on as many employees as possible and break shifts down into smaller increments. By dividing work schedules equally, you’ll be less likely to key in on certain employees for holiday work.
6. Don’t make assumptions. Single people often get leaned on to work holidays. But what if your single employees are all minorities or members of the same religious group? You could give the appearance of discriminating by forcing them to work unfavorable hours.
7. Keep track of all requests for holiday time off. And keep a log of your organization’s attempts to accommodate em-ployees’ leave requests. If you think an employee’s request will place an undue hardship on your organization, write down the alternatives you suggested to accommodate the employee. If the employee refuses your accommodation, document the refusal.
Avoiding religious bias
It’s best to try to accommodate religious-related leave requests whenever possible. Employees are well aware of their religious-bias rights. Lawyers for religious- advocacy groups say that as holiday season approaches, they receive more calls from employees asking about their rights. Many calls result in legal action.
But federal law says that you can still force people to work on religious holidays or the Sabbath, regardless of their religious needs, if their absence would create an “undue hardship” on the business.
That means the organization’s or department’s well-being would be seriously hampered by the person’s absence and you have no way to reasonably accommodate the request. (Example: No other qualified employee is available to swap shifts.)
Final tip: Don’t try to second-guess an employee’s claim of a “sincere” religious belief; courts are quick to back up employees’ beliefs, even those that seem flaky.
