With Veterans Day approaching on November 11, employers may have questions about providing time off to employees and the pay requirements for employees who do work on Veterans Day. To help you understand the rules, here are answers to frequently asked questions about the holiday.
Q: Am I required to provide time off on Veterans Day for employees who are veterans?
A: Currently, five states expressly require employers to provide a full day off to veterans on Veterans Day:
- Iowa
- Massachusetts
- New Hampshire
- Oregon
- Tennessee
Q: If I'm required to provide a full day off to employees who are veterans, is the leave paid or unpaid?
A: All five states allow employers to offer either paid or unpaid leave for Veterans Day, but you may be required to provide advance notice as to what type of leave is provided. For example, Iowa requires employers to notify employees at least 10 days in advance if Veterans Day leave is paid or unpaid.
Q: In those five states, are veterans required to provide notice that they will need Veterans Day leave?
A: The Iowa, New Hampshire, Oregon, and Tennessee laws specifically address employee notice. Iowa and Tennessee require that employees provide their employer with at least one month's prior written notice of their intent to take time off for Veterans Day. New Hampshire requires employees to give advance notice in accordance with the employer's policies and procedures. Oregon requires at least 21 calendar days’ notice.
Q: Can I require non-veteran employees to work on Veterans Day?
A: Check your state law, which may have restrictions. For example, Massachusetts and Rhode Island prohibit certain employers from requiring employees to work on Veterans Day and other covered holidays.
Q: What if Veterans Day is also our payday?
A: The Federal Reserve and banks are closed on federal holidays, including Veterans Day, 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.
Q: If we’re open on Veterans Day, am I required to pay non-exempt employees a premium for working?
A: Under federal law, there's generally no requirement to pay non-exempt employees a premium for working on Veterans Day, unless it results in the employee working more than 40 hours in the workweek.
However, there are exceptions in some states where employers may be required to provide premium pay regardless of how many hours the employee worked. For example, in Rhode Island, unless the employer is granted an exception, hourly employees must be paid 1.5 times their regular rate of pay for any work performed on Veterans Day or another covered holiday (or Sundays).
Q: I have a non-exempt employee who receives a paid holiday on Veterans Day and will work 40 hours in the same workweek. Would this employee be entitled to overtime?
A: Paid time off generally doesn't count toward hours worked when determining whether overtime is due. Therefore, unless you promised otherwise, the employee wouldn't be entitled to overtime under federal law in this situation. Keep in mind that some states, including California, require daily overtime for hours worked over eight hours in a workday. In these states, the employee may be entitled to overtime under state law. Check your state law to ensure compliance.
Q: We offer employees two times their normal pay rate to work on Veterans Day. Do I have to include holiday premium pay when determining an employee's regular rate of pay for overtime?
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, under federal law, 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.
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 Veterans Day. If they work 9 hours on Veterans Day and a total of 49 hours for the workweek as a whole, they would be owed: $216 (9 hours × $24) for the holiday work and $480 (40 hours x $12) for the other 40 hours worked in the week for 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 the amount toward statutory overtime compensation due. Keep in mind that your state law may have different rules.
Conclusion
Make sure you understand the rules that apply to your business and clearly communicate, and consistently apply, your policies on holidays.