What is the difference between holiday pay and overtime pay?

Holiday pay is premium compensation for working on designated public holidays, typically 1.5x-2x regular rate. Overtime pay is compensation for working beyond standard hours (usually over 40 hours/week in the US), typically 1.5x regular rate. They serve different purposes and have different legal requirements.

Can I receive both holiday pay and overtime pay?

Yes, in many cases you can receive both. If you work over 40 hours in a week that includes a holiday, you may receive holiday premium for the holiday hours AND overtime for hours exceeding 40. However, the specific rules depend on your employer's policy and local laws.

Is holiday pay legally required like overtime pay?

In the US, overtime pay is required by federal law (FLSA) for non-exempt employees working over 40 hours/week. Holiday pay is NOT required by federal law—it's typically a voluntary benefit offered by employers. This is a key legal distinction.

Do holiday hours count toward overtime?

Generally, hours actually worked on a holiday count toward your weekly total for overtime calculation. However, if you receive a paid holiday off (without working), those hours typically do NOT count toward the 40-hour overtime threshold.

What happens if I work overtime on a holiday?

If you work overtime on a holiday, you may receive stacked premiums. For example, if you work 12 hours on a holiday and regular shift is 8 hours, you might get holiday rate (1.5x) for 8 hours plus holiday-overtime rate for the extra 4 hours. Check your employer's policy.

Which employees are eligible for overtime but not holiday pay?

Non-exempt employees are legally entitled to overtime pay under FLSA, regardless of employer policy. Holiday pay, being voluntary, depends entirely on the employer. So you could be entitled to overtime but receive no holiday premium if your employer doesn't offer it.

Holiday Pay vs Overtime Pay: What's the Difference?

Quick Comparison

Aspect	Holiday Pay	Overtime Pay
Purpose	Compensate for working on holidays	Compensate for extra hours worked
US Legal Requirement	Not required (voluntary benefit)	Required for non-exempt employees
Typical Rate (US)	1.5x - 2x regular rate	1.5x regular rate
Trigger	Working on designated holiday	Working over 40 hours/week
Who Decides	Employer policy	Federal/state law (FLSA)

Understanding Holiday Pay

Holiday pay is premium compensation for working on recognized public holidays like Christmas, Thanksgiving, or Independence Day. Key characteristics include:

Voluntary in the US: No federal law requires holiday pay
Employer-determined: Rates and eligible holidays vary by company
Typically higher: Often 1.5x (time-and-a-half) to 2x (double-time)
Recognition-based: Compensates for sacrificing personal time

Understanding Overtime Pay

Overtime pay is compensation for hours worked beyond the standard workweek, typically 40 hours in the US. Key characteristics include:

Legally required: FLSA mandates overtime for non-exempt employees
Standardized rate: Minimum 1.5x regular rate by federal law
Hours-based: Triggered by exceeding hour thresholds
Weekly calculation: Based on 40+ hours per workweek

Some states like California also have daily overtime requirements (over 8 hours in a day), adding another layer of complexity.

Legal Requirements: A Key Distinction

Holiday Pay (Voluntary)

Under the Fair Labor Standards Act (FLSA):

Employers are NOT required to pay premium for holiday work
Employers are NOT required to provide paid holidays
Holiday pay is entirely at the employer's discretion
Some state laws require premium pay for certain industries (rare)

Overtime Pay (Mandatory)

Under the FLSA:

Non-exempt employees MUST receive overtime pay
Minimum rate is 1.5x regular rate for hours over 40/week
Employers cannot waive overtime requirements
Violations can result in penalties and back pay

How They Interact: Scenarios

Scenario 1: Working 8 Hours on a Holiday (40-hour week)

Situation: You work your normal 40-hour week, including 8 hours on Christmas.

• Holiday pay: 8 hours × holiday rate (if employer offers it)
• Overtime: None (only 40 hours worked)
• Result: Holiday premium only (no overtime)

Scenario 2: Working 48 Hours Including a Holiday

Situation: You work 48 hours in a week, including 8 hours on Thanksgiving.

• Holiday pay: 8 hours × holiday rate (if offered)
• Overtime: 8 hours × 1.5x regular rate (hours over 40)
• Result: BOTH holiday pay AND overtime pay

Scenario 3: Working 12 Hours on a Holiday

Situation: You work a 12-hour shift on July 4th in California.

• Holiday pay: 12 hours × holiday rate (if offered)
• Daily overtime (CA): 4 hours × 1.5x rate (hours 9-12)
• Double-time (CA): Hours beyond 12 would be 2x
• Result: May receive stacked premiums depending on policy

Scenario 4: Paid Holiday Off

Situation: You receive a paid day off for Memorial Day, then work 40 hours the rest of the week.

• Holiday pay: Full day's pay for the holiday
• Hours worked: 40 hours (not counting holiday off)
• Overtime: None (holiday hours off don't count toward 40)
• Result: Holiday pay only

Stacked Premiums: When You Get Both

Some employers allow holiday pay and overtime to stack, meaning you could receive both premiums simultaneously. For example:

Holiday overtime rate: Holiday rate (1.5x) × overtime multiplier (1.5x) = 2.25x
Double-time holiday: Holiday rate (2x) for the base, plus overtime for extra hours

However, stacking policies vary by employer. Some count holiday pay and overtime separately rather than multiplying them.

Exempt vs. Non-Exempt Employees

Non-Exempt Employees

Entitled to overtime pay (mandatory)
May receive holiday pay (if employer offers)
Typically hourly workers or salaried under $35,568/year

Exempt Employees

NOT entitled to overtime pay
May receive holiday pay (if employer offers)
Typically salaried professionals, executives, administrators

Exempt status affects overtime only—holiday pay eligibility depends entirely on employer policy for all employees.

Common Questions

Do hours worked on holidays count toward overtime?

Yes, hours you actually work on a holiday count toward your weekly total. If you work 32 regular hours plus 8 holiday hours, you've worked 40 hours and any additional hours would trigger overtime.

What if I don't work but get paid for the holiday?

Paid holiday hours (when you don't work) typically do NOT count toward the overtime threshold. So if you get 8 hours of holiday pay plus work 40 hours, you haven't triggered overtime—only the 40 actually worked hours count.

Can my employer offer holiday pay instead of overtime?

No. Overtime pay is a legal requirement that cannot be substituted with holiday pay, comp time, or other benefits. Employers must pay overtime for hours over 40 regardless of any holiday pay offered.

Disclaimer: This guide provides general information about holiday and overtime pay. Laws vary by state and country, and employer policies differ. This is not legal advice. Consult with HR or an employment attorney for specific guidance about your situation.