It’s a mistake if you don’t pay employees for federal holidays

Most medical practices welcome the major federal holidays and the opportunity for the entire staff to take a day off.  A day when the doors are locked, however, is also a day that generates no income for the practice. It begs the question: Should the practice pay its employees a day’s wages for the holiday?

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It may come as a surprise that the Fair Labor Standards Act (FLSA) administered by the U.S. Department of Labor does not require employers to pay for time not worked, “such as vacations or holidays (federal or otherwise),” according to the department’s website. “These benefits are generally a matter of agreement between an employer and an employee.”

The Society for Human Resource Management (SHRM) conducts an annual survey of holiday schedules among American businesses. Its 2017 survey discovered that more than 90 percent of businesses offer employees six paid holidays per year:  New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

The Bureau of Labor Statistics records higher numbers of paid holidays. For full-time employees in 2016, employers offered an average of 7.6 paid holidays, while employees in the professional, technical and related fields averaged 8.5 paid holidays.

How important are paid holidays to employees?  It turns out that paid time off is a more valuable benefit that most employers realize. A survey conducted by the human resources software development firm CakeHR found that chief financial officers believe that benefits packages, scheduling flexibility and professional development were the most important factors in employee retention-but when their employees were asked the same question, they put paid time off at the top of their priorities.

Not every practice makes paid holidays part of its benefits package, and this can come as an unpleasant surprise if it’s not spelled out when an employee is hired. Employees need to know upfront if they will be paid for holidays, which holidays the practice considers to be paid days off, and what the level of compensation will be for those days.

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If the practice chooses not to pay for holidays, it may influence a potential employee’s decision to take a job with the practice.

For Donna Tuttle, MD, a family practitioner and one of three partners with Five Corners Family Practice in Schenectady, New York, paying employees for federal holidays is an important element in the benefits package. “It’s one of those things that I never considered not doing,” she says.

Tuttle came into the practice while it was owned by the local hospital system, which offered employees seven paid holidays annually, including two days for Thanksgiving. When she and her partners became independent of the hospital, they added Christmas Eve to the benefits package.

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The holidays add to the practice’s overall expenses, but they see the return on this investment. “We make money seeing patients, so it really comes down to how much I am willing to work and when,” Tuttle said. “Employees get as much vacation and as much holiday time as I do.” Working more hours to provide this benefit to employees pays off in other ways, she says. “I do realize that I probably get paid less than a lot of other providers in primary care, but it’s one of the reasons that we have very little turnover.”

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Anita L. Jones, DDS, who runs a solo oral surgery practice in Fall River, Mass., concurs with Tuttle. “When I bought the practice, the doctor I bought it from already paid seven holidays,” she says. “I couldn’t take benefits back from employees, so I kept doing that. I expect that if I’m working, they’re working-but if I close the office on a day when they would be working, the employees get paid,” she said.

Jones’ practice sees many school-aged children and working people, some of whom would be pleased to come in on Memorial Day, Labor Day or the day after Thanksgiving when they have the time off to undergo oral surgery. “I often feel like I should not take those holidays, that we should be working,” she says. “But when those days come around, I want them so much that I’m glad to close the practice and take them off.”

Both Tuttle and Jones observe holidays that fall on a non-work day-such as when Christmas Day falls on a Saturday and Sunday, as it did in 2016-by giving employees either the Friday before or the Monday after the holiday as their day off. A schedule goes out early in the year to let employees know which days the practice plans as holidays in that year.

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Not all practices can offer holidays off, especially if they are affiliated with a hospital and are operating on major holidays. In these cases, employees may earn additional pay for working on a holiday. Double time for holidays or another day off at the employee’s discretion can make working on Christmas a more attractive option, especially for those who are looking to earn extra money or flexible personal time.  SHRM’s survey determined that 57 percent of businesses offer employees additional pay when they are required to work on a holiday, with 40% of these offering double-time pay and 21 percent providing time-and-a-half. Another 19% offered an unspecified amount of overtime.