Veterans Day: Time Off and Pay

With Veterans Day approaching on November 11, employers may have questions about providing time off and the pay for employees who do work on the holiday. Here’s a brief overview of rules governing Veterans Day.

Time off

Non-veterans

Unless mandated by contract or agreement, private employers are generally not required to provide Veterans Day as a paid holiday to nonexempt employees (those entitled to minimum wage and overtime). While some states have laws that restrict certain types of businesses from operating on Veterans Day, these laws don't require nonexempt employees to be paid for this time off.

However, if your company closes for Veterans Day, employees classified as exempt from overtime (those who meet specific salary and duties requirements) must generally still receive their full pay, as long as they work any part of the workweek.

Veterans

Currently, five states expressly require employers to provide time off to veterans on Veterans Day: These states are:

Iowa
Massachusetts
New Hampshire
Oregon
Tennessee

All five states allow employers to offer either paid or unpaid leave to veterans for Veterans Day, but employers 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.

Requiring work on Veterans Day

Some states have restrictions or prohibitions on requiring employees to work on holidays. Check your state law for details. For example, Massachusetts restricts and Rhode Island prohibits certain employers from requiring employees to work on Veterans Day.

Paid time off and calculating hours worked

Paid time off doesn't count toward hours worked when determining whether overtime is due. Therefore, unless you promised otherwise, an employee wouldn't be entitled to overtime under federal law if they take a paid holiday for Veterans Day and then work 40 or fewer hours the remainder of the workweek. 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.

Pay rate for work on Veterans Day

Under federal law, there's generally no requirement to pay nonexempt 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 deemed exempt by the state, nonexempt 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).

Absent a requirement, many employers pay nonexempt employees a premium for working on a holiday as an incentive. Keep in mind that under federal law, premium pay for work on a holiday may be excluded from the regular rate of pay determination only 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, 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.

Your state law may have different rules, so be sure to check those.