CT Holiday Pay Laws: A Primer
According to the Connecticut Department of Labor: "Connecticut’s general wage and hour laws govern an employee’s entitlement to holidays, whereas collectively bargained agreements determine specific holidays to be observed and the eligibility criteria for employees to receive holiday pay." The CT Department of Labor also maintains a list and definition of Holidays.
Accordingly, as the quote above from the CT DOL states: "The Connecticut statute requires that employers either provide paid holidays or receive payment for holiday hours worked subject to the terms of established policy, including provisions in a collective bargaining agreement."
The CT DOL also states that "The State of Connecticut recognizes the following 12 holidays: New Year’s Day, Martin Luther King Jr. Day, Washington’s Birthday, Good Friday, Memorial Day, Juneteenth National Freedom Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, the Day of Mourning (Thanksgiving Day), and Christmas Day . All employers, whether unionized or not, are required to observe these 12 holidays by either granting holiday pay or allowing employees to take the day off with pay."
However, Connecticut is one of many states that have laws regarding the payment of wages that differ from those established in the federal Fair Labor Standards Act ("FLSA") and the regulations of the federal Wage and Hour Division ("WHD"). Many state law differences are found with respect to sick pay, vacation pay, severance and similar issues. However, state laws are similar to the federal law in many respects, including the FLSA provisions that require that non-exempt employees be paid overtime hours for hours worked in excess of forty hours in a week (or worked in excess of 8 hours in a day during certain workweeks). Moreover, the Connecticut Constitution, Article I, Section 20 has provided for a minimum wage in Connecticut since 1965 and the CT General Assembly established the minimum wage of the State of Connecticut in Public Act No. 11-52, effective January 1, 2014. In addition, Conn. Gen. Stat. § 31-60 et seq. regulates payment of wages in Connecticut.
CT Employees’ Holiday Pay Eligibility
There is no universal standard regarding whether an employee in Connecticut is eligible for holiday pay. Instead, eligibility largely depends on the company policy. In most companies, full-time employees who have worked long enough to be eligible for benefits are frequently the only ones who receive holiday pay. Lesser entitled groups might include full-time employees who have worked for a specific period, full-time employees who have at least one year of seniority, full-time employees who have worked at least 1,250 hours in the preceding 12 months, or even full-time workers who have worked full-time for just six months. In this way, temporary employees, part-time employees, interns, and even contract workers are typically not entitled to holiday pay. Although it is not required by law, many employers offer their employees paid time off for holidays and shared time off during the holiday season.
Mandatory or Voluntary Holiday Pay Policy?
CT law identifies specific holidays that employers either must pay non-exempt employees who work on those holidays, or that may require employers to pay employees who don’t work on those holidays. It’s important for employers to understand these notifications and plan accordingly.
Connecticut law only requires employers to compensate employees working during federally recognized holidays. There are 10 federal holidays: Because the four holidays that occur during the first week of September (Labor Day, Patriot Day, and the two days of Rosh Hashanah) fall outside of the first week of the month, they don’t trigger the mandatory pay rules. Consequently, there is no legal requirement, for example, for employers to pay employees for not working on Labor Day, Patriot Day, or those days of Rosh Hashanah just because they fall on a specific day of the month. Employers do have the option of voluntarily offering such benefits if they choose to do so.
Employers may be required to pay non-working employees for the federal holidays depending on whether they provide holidays as a benefit. If employers provide the holidays as a benefit, Connecticut law requires that the employer must make such payments pursuant to its policy. For example, if an employer provides employee the day off with pay on Memorial Day as a benefit, the employer will have to pay employees for the day off. However, if the employer requires that its employees work on Thanksgiving but voluntarily pays non-working employees for the holiday as a benefit, the employer may do so. In that case, the employee must be paid pursuant to the employer’s policy.
Essentially, paying non-working employees for the holiday is voluntary whenever the employer does so without requiring or allowing its employees to work. But should an employer want to impose upon its employees mandatory payment for a holiday, it cannot do so unless the day off is mandated by law or the employer has included such a requirement in its policies. Connecticut law does not impose a duty upon employers to pay employees for when they are non-working on federal holidays. Employers are free to voluntarily make such payments for their employees.
Holiday Pay Calculation Under the CT Law
Employers should be aware that the selection of a methodology to calculate holiday pay must be made prior to the holiday. For example, most employers would not want to select the percentage of gross earnings calculation for the Christmas holiday and the hourly rate for the Thanksgiving holiday.
The calculation of holiday pay can take the form of hourly rate calculation, percentage of gross earnings or flat rate for the day.
Hourly Calculation
The hourly calculation is likely the most common method of calculating holiday pay. According to state law, unless other arrangements have been made between the employer and employee, an employee is entitled to be paid for eight hours at his or her regular rate of pay for the day on which the holiday is observed (i.e., Christmas Day). As such, if an employee works on the holiday the employer simply pays the employee his or her regular rate for the actual hours worked on the holiday plus eight hours at the regular hourly rate (if the holiday is worked by the employee). Likewise, if an employee is absent on the day that the holiday is celebrated while he or she would normally have worked, the employer must pay the employee eight hours of regular pay for the holiday (i.e., to the extent the employer has a company policy entitlement for a paid holiday for employees who do not work on that holiday). Any additional hours worked may be considered overtime, and the employer should compensate the employee the appropriate overtime rate (time and a half) for any hours worked beyond 40 in the work week.
Percentage of Gross Earnings Calculation
The second calculation is typically used for organizations with higher earning employees that offer holiday pay in a lump sum. Employers may choose to allocate the holiday pay based on an hourly percentage of gross earnings (i.e. 4% of gross earnings in the last four weeks) for the period how holiday pay is calculated.
Flat Rate of Day Calculation
The third method of calculating holiday pay is the traditional method of providing either a flat day’s pay or percentage of gross earnings. For example, an employer may elect to offer a day’s pay in the amount of $125 for holiday pay (holiday pay not to exceed 8 hours). Or, the employer may choose to pay a percentage (i.e., 4%) of the employees’ gross earnings in previous four week. Many employers elect to pay a percentage of gross earnings since that is the most common method of calculating holiday pay. The flat rate or percentage of gross earnings calculation is generally more beneficial for low wage employees who work infrequently.
Case Studies of CT Holiday Pay Issues
As with any area of the law, there are always disputes that arise related to the payment of wages during holidays. Here are some common examples of disputes that we have seen or encountered relating to the CT Holiday Pay laws: 1. Employers mistakenly believe that the requirement for the holiday premium is lowered if more than three holidays are observed. For example, an employee who works on Thanksgiving and the day after Thanksgiving may be entitled to only one holiday premium. There is no authority for the proposition that a multi-holiday schedule lessens the burden. This means that a full time employee who works on two holidays is entitled to two premium payments. 2. A disputed issue has arisen over whether hourly employees who have been hired after a holiday can collect the premium payment. In addressing this issue, the Connecticut Department of Labor has stated that this is a question of contract interpretation and must be examined on a case-by-case basis. 3 . An employee who was paid overtime in the course of the regular workweek but denied holiday pay may assert a claim against his employer under the Connecticut minimum wage law (CGS 31-58) seeking full pay for hours worked, overtime pay, a daily holiday premium and liquidated damages (equal to twice the amount of unpaid wages) for the four year period permitted under the law. 4. Employers frequently employ part-time employees on shifts which do not extend through traditional business hours of 5:00 p.m. to 7:00 p.m. and thus deny the premium holiday pay to them. For a bakery, for example, the business may ordinarily have stop production at midnight. The day following a holiday — a holiday on which the bakery will ordinarily be closed and thus no bread or pastries will be produced — employees may be called in to ensure that the machines are running properly and are undamaged. There can be no work on the machinery or the typical work of daily production because the business is closed. In these circumstances, the bakery may require a few employees to come in on holiday early into the morning or late at night to ensure the smooth run of the plant the following day. Holiday pay is still due to part-time employees employed to run manufacturing operations.
CT Holiday Pay Tips for Employers
An employer can manage holiday pay compliance in a few ways:
First, make certain that the policies are consistent with Connecticut law. There are differences between Connecticut law and federal law on such things as how time is to be calculated, whether overtime applies to holiday pay and whether there is an offset for holiday hours worked. It is also important to consider exceptions for employees arriving late, those having to switch shifts, those working out of shift order or having to change schedules due to staffing shortages. Union contracts may also impose more exacting standards than Connecticut law. Employers need to understand these differences and take them into account in their policies.
Second, have a policy in place that clearly states the rules for holiday pay. Policies should be presented to workers in a written document. A policy should also be acknowledged by the employee in a signed document – such as a personnel handbook, a memo or an acknowledgment form noting the employee’s receipt of the policy. Employers should be certain that employees actually receive the policy, specifically train employees on it, and have managers enforce the policy. The policy should detail how many holidays the employee is entitled to and the number of hours it covers. If particular shifts are covered, the policy should be specific and state what counts as an emergency and the manner in which duties are assigned in an emergency. Policies should say if the pay applies to part-time employees and if full-time employment is necessary to be eligible for holiday pay. A policy that is followed by all, and understood by all, helps protect an employer from future claims. To be effective, the policy must be enforced.
Third, employers should regularly review holiday pay policies. A mandated benefit, such as holiday pay, is ideal business fodder for class action litigation. Plaintiffs’ counsel tend to scour the policies of multiple companies and will seize upon any inconsistencies or weaknesses in the policies of individual employers. Whether the plaintiff’s claim is meritorious or not, few employers are going to fight a holiday pay claim all the way to summary judgment. Preventive medicine is more cost effective. These costs include attorney’s fees finding a way to dismiss the case, the cost of the defense of the state claim, the requirement of providing certain records and attorneys’ fees (and that of plaintiffs’ counsel) to the successful plaintiff. Class action claims also can force settlement at a stage in the process where the company is unable to assess the merits, whether employees actually will be found liable and whether it might be less expensive to pay a settlement than to litigate. To avoid this unattractive situation employers should review their policies at least once every twelve months.
The Future Of CT Holiday Pay
The Connecticut General Assembly has a long and storied history of passing legislation designed to improve the workplace for its constituents. One need only look at the Connecticut Paid Leave Act, which will go into effect on January 1, 2022, to see an example of that. These types of new legislation will likely continue into the future.
In addition to new statutes, many other changes could impact holiday pay in Connecticut. For example, this year’s CT General Assembly session is underway, which means that employers and employees alike should stay tuned for potential changes to CT’s laws governing holidays and holiday pay. There have been several bills in the last few years that would have an impact on whether or how holiday pay is required, but all of them have failed to pass up to this point. That will likely change.
While it is impossible to predict the outcomes of these (or other) bills with total certainty , we can glean quite a bit of information from proposed legislation from previous years. For example, there have been proposed bills in both 2019 and 2020 seeking to require employers in Connecticut to provide mandatory time off or pay for mandatory time off for all or specified state-recognized holidays for employees who must work during those holidays. Those bills have failed. However, similar bills in 2021 and 2022 succeeded in receiving a public hearing, suggesting that there is growing momentum behind requiring CT employers to comply with mandatory time off provisions for holidays. So while prior legislation has failed to become law, there is continued interest in ensuring that Connecticut employees receive some pay or time off for working during holidays. Employers are encouraged to stay tuned for updates on any new legislation that might affect holiday pay.