Episode 140: California Holiday Pay, Time Off Rules

Welcome to the Workplace, a podcast by Cal Chamber. I'm Matthew Roberts, Employment Law Counsel and the Labor Law Helpline Manager with the California Chamber of Commerce. On our previous episode, we discussed holiday parties and how employers can have a great time and avoid those compliance headaches too. If you missed that episode, I really encourage you to go give it a listen because today we're sticking with the holiday theme. Holiday parties are, of course, great fun, but something that a lot of employers and employees really look forward to this time of year is some time off or some reduced work schedules because of all the holidays that tend to fall around this time of year. Of course, with these changes in the schedule and the days off that come with this, there's always some common questions that we get at the Chamber, especially on the Labor Law Helpline about how an employer can manage the pay, their policies and leave issues that may be associated with this time of year and, and employees wanting to take some time away. Now that we're here at the end of a long year in which we did a lot of great work and we're ready for some rest and relaxation. Joining us again today is Cal Chambers, Vice President of Labor and Employment, focusing on content, training and advice, Bianca Saad. Welcome back, Bianca.

Thanks, Matt. It's always a pleasure to be here.

While a wage and hour discussion may not be as fun as the holiday party discussion we have, I think you and I both agree that this is really a vital part of maintaining compliance through the holiday season, right, Bianca?

Yes, absolutely. Wage and hour issues tend to be a hot topic around this time of year every year. Of course, many people look forward to having some time off to spend with their family during the holidays. That really brings us to this starting point for the discussion, which is how California law treats holidays in the first place. First off, it's important for employers to remember that California actually doesn't require employers to provide holiday payments even for holidays that are recognized at the state or federal level. Whether an employer is going to pay for the holidays is going to depend on a couple of things. How that employee is classified, meaning are they an exempt or non exempt employee, and then also their own policy.

Right. And this was a question that came up frequently, actually earlier in the year when the federal government recognized Juneteenth as a holiday. Something I got on the helpline real frequently was, okay, we have this new federal holiday, right? What are we supposed to do with this? Because they announced it, I think the day before the actual holiday. So employers were freaking out, trying to figure out, okay, do I need to shut down? Do I need to provide pay? What is it that I'm supposed to do? And so your point is really well taken, Bianca, and one that's really important to remember is that holidays really are the exclusive province of the employer. You don't have to shut down for a holiday, you don't have to pay for a holiday. Whatever you do with the holidays is going to be based upon your policy. And so I think this is a good time now really to start talking about that policy. Right. And what employers can do. So, Bianca, what are some things that employers can look at in terms of creating their own holiday policy?

So one of the things employers can look at, you know, they have some different options, but for example, they may want to differentiate between classes of employees who are going to receive that holiday pay. For example, your full time employees might receive holiday pay where your part time employees don't, or some other differentiation between classes. Now, the holiday schedule, again, that is going to be up to you. If employers do want to pay for some holidays, they can set that holiday schedule and it's something that they can do. For example, the beginning of each year, they can send their employees a list of these are letting them know that these are the certain paid holidays. Those are just a couple of examples of things that employers can do as far as how they're going to set their policy. And then there are, of course, some other considerations that are around the issue of whether or not an employer can deny somebody holiday pay or withhold it if they are not working the day before and after that actual holiday.

Right. And that's something that employers like to talk about because we always have that concern. Right. Someone's going to call out sick before the holiday in order to get that extra day off. Of course. And you know, it's a frequent enough occurrence that we hear about it on the helpline. Often employers are, they want to provide holiday pay as a benefit to employees who they feel, you know, has earned it. They've worked. They've worked through the time period that they're supposed to work. Here's an added extra benefit. And a lot of what we talk about with this is, yes, of course, you know, like we say, and like will be a running theme throughout this podcast really is it's your policy. You guys get to set it. So if you guys want to have a policy that says you have to work the day before or your previously scheduled day before and your next scheduled day after in order to actually receive the pay for the holiday, that's something that we can do. But of course, we're in California. There's always a pitfall, Right. So, Bianca, talk to us about what that biggest pitfall is. When we have those employees who are calling out sick the day before, the day after a holiday.

Yes. And this is a huge pitfall that employers do need to be aware of if they are going to implement that policy. You have to be really careful with California's paid sick leave law, because as we all know as HR professionals, with the California paid sick leave law, there's that anti discrimination provision to where we are not doing anything to be punitive to an employee or retaliatory against that employee who is using their paid sick leave as protected time. So if an employee were to call out sick and they're using their protected paid sick leave time under California law, then they cannot be punished, so to speak, in being denied that holiday pay. So if an employer is going to deny that holiday pay in that instance, that would be a violation of the labor code. Now flip it around. If you have an employee, they're absent for reasons that are not covered by the paid sick leave law, or they had no sick leave available, then they're not protected in that regard in that instance. And you could deny the holiday pay.

Excellent. And something that comes up then is we don't shut down on holidays. So we need a workforce that's there on the holidays. And we'd like to encourage employees to, you know, work on the holiday while giving them a benefit. Now, something the labor commissioner takes the position on is if you have this policy of granting holiday payments, then that's kind of a contract with the employees to provide them that pay in some way, shape or form. So, Bianca, what are some options employers can do for handling that holiday pay issue when the employee actually has to work on the paid holiday that we've designated?

Yeah. So the employer has a few different options. They can pay for all hours worked, plus the holiday pay at straight time. They can pay for all hours worked and provide them another day off instead. And one thing to keep in mind is that they do not have to pay the premium rate. That's the time and a half. They don't have to pay that higher rate. However they could choose to do so. Again, that's going to be through their policy. So, and as you know, our listeners have probably caught on by now all of a lot of this, because holiday pay, again, isn't required under California law, is going to be driven by your policy, which is really important to have clearly laid out in your employee handbook.

Right. And I think that really dovetails into that best practice. Right. If we're going to set the policy, let's put that in our employee handbook because then it's well spelled out, it's well written. There's no confusion. You know, those misconceptions oftentimes employees have, because I hear other employees at other jobs, well, he got, you know, time and a half or, you know, my sister got time and a half for working on Thanksgiving, but I didn't get it. Is that illegal? And the answer is no. It's up to the employer's policy. Now, how does this work for, say, exempt employees? You know, we work for an employer who shuts down on a holiday during the week. Do we have to pay exempt employees for that time? What do you think, Bianca?

Yeah, that's a great question. So our exempt employees are always a little bit different. Our exempt employees are going to be paid for the whole week if they have performed any work in that week, even if the employer shut down for the holiday. All right. So it's a little bit different than our non exempt employees. So as long as that exempt employee worked any day within that week, they are going to be paid for the whole week, even though there was that closure for the holiday.

Excellent. And I think kind of put a bow on this conversation, really, about holiday pay. And our policy is these hours that we pay for holiday pay, whether it's straight time or whatever, we decide to provide for holiday payment, these are not hours that are actually worked, so they don't go towards overtime. So an employee could work five days in a week, 40 hours in a week, and get an additional eight hours of holiday pay and there'll be no overtime there because they didn't actually work those eight hours of the holiday pay. Now, moving on from holiday pay, you know, still during this time of year, as we said at the, at the outset, employees want some time off. Right. Not just the holiday itself, but, you know, it's winter vacation, kids are out of school for a couple weeks, and employers may be inundated with a lot of vacation requests. How can employers kind of mitigate the.

Number of requests they get while still trying to provide the time off to those who have it.

Yeah, that's a great question. So, of course, always keeping in mind and that caveat in mind of protected paid sick leave time. Right. That might go into effect. So if an employee is calling out and they have that protected sick leave time, that's a separate issue than what we're talking about here, if employers have a busy season, there are times where quotas need to be met. There are deadlines. They can have policies that are going to.

Limit the amount of vacation that employees can request. Again, the key there is you're having that it's a neutral policy that's applied consistently and it's clearly communicated in your policy. Another thing that employers should keep in mind is whether or not that time off might be related to religious accommodations. So if an employer is getting a request for time off for religious reasons, then they're going to need to engage in that interactive process to explore how that religious observance may interfere with the duties and the schedule of that employee.

Excellent. Well, let's just say we deny time off or an employee doesn't really have the time to take off, so they're present at the workplace. But as we know, during this time of year, there's online shopping to be had. I mean, especially this time of year, we've gotta do it earlier than ever. Supply chain issues, inflation issues. My son's headphones that he wants for his video game system are all out of stock everywhere. So I am scrambling to find this thing that he really wants. And so employees may be tempted to take their time that they're supposed to be at work doing that, or, you know, it's a slower time of the year, we may be taking extended lunches, these kind of things where there may be some production issues or those who are present are underperforming. What tips do employers have for kind of tightening that up and making sure that our employees, when they are present, are actually present at the workplace?

Yeah, I think the number one thing is just for employers to remember and, you know, and keep in mind that while it may be the holiday season, it's a time of, you know, extra relaxation. Again, people wanting to spend time with their families. You know, we're here at the workplace. We have, you know, everybody has a job to do. And those work performance standards and policies, those can be maintained throughout the year. And that is, you know, the standard really should be no different. And employers do not need to shy away from that during the holiday season. For those employees that are coming to work, they are present and in the office, or they're, you know, logging in on their computer. You know, the expectations are the same.

Excellent. Well, Bianca, it was a real holiday treat having you on again. So thank you for joining us today.

Thank you, Matt. It's always a pleasure.

And thank you, listeners, for joining us on the workplace. Please comment, share and subscribe to Cal Chamber's podcast by visiting calchamber.com Sam.