With the third federal observance of Juneteenth National Independence Day (June 19) right around the corner, employers may have questions about how to ensure employees can observe the holiday as they evaluate the impact on their operations. Here are answers to some frequently asked questions about the Juneteenth holiday.
Q: What is Juneteenth?
A: Juneteenth is a holiday that commemorates the end of slavery in the United States. The date of June 19 is significant because on that day in 1865, word reached enslaved individuals in Texas that they were free. Communities have been celebrating Juneteenth since 1866. Many states have recognized Juneteenth as a holiday, but the federal government didn’t do so until 2021.
Q: Are private employers required to offer employees paid time off on Juneteenth?
A: Unless obligated by contract or agreement, private employers are generally not required to provide paid time off to nonexempt employees (those entitled to minimum wage and overtime) on any holiday*, including Juneteenth. However, if your company closes on Juneteenth (or any other holiday), exempt employees (those who meet specific salary and duties requirements) must generally still receive their full salary, as long as they work any part of the workweek.
Q: What if I offer paid time off on other legal public holidays, must I include Juneteenth?
A: Employers may generally choose which (if any) holidays to observe as paid ones. Given the significance of Juneteenth, employers may want to recognize it as a paid holiday. Employers should also consider equity and consistency when developing and applying pay practices for holidays.
Q: How are most employers handling Juneteenth this year?
A: Many employers have joined the list of companies that have made a practice of observing Juneteenth as a paid holiday. Other employers will continue to offer floating holidays that employees can use on any day, including Juneteenth. Some employers are also recognizing Juneteenth in the workplace through companywide communications and events.
Q: If we remain open on Juneteenth, am I required to pay nonexempt employees a premium for working that day, now that it's a federal holiday?
A: Under federal law, there's generally no requirement to pay nonexempt employees a premium for working on a holiday, unless it results in the employee working more than 40 hours in the workweek.
No state currently requires premium pay for working on Juneteenth, but Massachusetts did require it up until January 1, 2023. In Rhode Island, unless the employer is exempt, nonexempt employees must be paid 1.5 times their regular rate of pay for any work performed on a covered holiday (or Sundays). However, Juneteenth isn’t currently recognized as a state holiday in Rhode Island.
Even in the absence of a requirement, many employers offer premium pay to employees who work on a holiday.
Q: If I offer premium pay to work on a holiday, how does it affect overtime calculations?
A: Under federal law, the overtime rate is 1.5 times the employee's "regular rate of pay." An employee's regular rate of pay includes their hourly rate plus the value of nondiscretionary bonuses, shift differentials, and certain other forms of compensation. However, premium pay for work on a holiday may be excluded from the regular rate of pay determination if it is at least 1.5 times what the employee receives for work performed in non-overtime hours on other days. If the premium rate for work on a holiday is at least 1.5 times the rate established in good faith for like work performed in non-overtime hours on other days, the compensation may also be creditable toward overtime pay due under federal law.
For example, let’s say an employee’s normal base wage is $12 per hour, but the employee is paid double that for work performed on a holiday. If they work 9 hours on a holiday and a total of 49 hours for the workweek, they would be owed, $216 (9 × $24) for the holiday work and $480 for the other 40 hours worked in the week, a total of $696. Since the holiday-work premium is at least 1.5 times the established rate for non-holiday work, it doesn’t increase the regular rate, and the employer may credit it toward statutory overtime compensation due.
Keep in mind that your state law may have different rules.
Q: Can I require employees to work on Juneteenth?
A: Check your state law, which may have restrictions. For example, Massachusetts prohibits certain employers from requiring employees to work on Juneteenth (and certain other holidays) as well as Sundays.
Q: What if June 19 is also our payday?
A: The Federal Reserve and banks will be closed on Monday, June 19, for Juneteenth, so direct deposits generally won't be posted to employees' accounts on that day. Keep in mind that some states require payment on the preceding business day if a scheduled payday falls on a holiday. Absent such a requirement, employers generally have the option of paying employees on the business day before or after the holiday. When your check date falls on a bank holiday and you wish to pay employees the day before, adjust your check date to avoid delaying payroll delivery.
Conclusion
Make sure you understand the rules that apply to your business and clearly communicate, and consistently apply, your policies on holidays.
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