During the holiday season, many California employers wish to close down between the Christmas holiday and the New Years holiday. That is fine, but there are a few wage and hour laws that need to be considered. First, regarding non-exempt employees, such employees do not have to be paid for hours they do not work. Thus, such employees need not be paid during the closure. If non-exempt employees have paid vacation time accrued but unused, they should be given the opportunity to use that paid vacation time during the closure, but they should not be forced to do so. Of course, if the employer has a policy offering paid holidays for Christmas and New Years Day, employees should be paid for those two days and should not have to use their vacation time.
Second, regarding exempt employees, such employees are entitled to be paid an entire week’s salary for any week in which they do any work, subject to a few exceptions that I won’t go into here. But, if an exempt employee is directed not to work for an entire week, and is not allowed to do so, he or she is then not entitled to be paid for that week. (Just as with non-exempt employees, exempt employees can use their accrued vacation time if they want to during that time, but they should not be forced to do so.) Thus, in determining whether to pay an exempt employee during a closure between the Christmas and New Years, the employer has to first determine what its regular workweek is, and then determine if the closure time spans and entire week.
The default rule in California is that a work week is from Sunday through Saturday. Assuming this is the applicable work week, this year there should be no problem with not paying exempt employees during most of the holiday closure because most employers will be closed from Sunday, December 25 through Saturday, December 31, a full work week. But, assuming the employer re-opens on January 3, exempt employees would still be entitled to be paid their entire weekly salary for the first week in January, even though that week is shortened by a day. For comparison purposes, if Christmas falls on a Wednesday and New Years falls on a Monday, and the employer is closed from Wednesday through Monday, exempt employees who work Monday and Tuesday of the Christmas week, and come back to work on Tuesday after New Years, would lose no pay. The employer in this example would have to close the entire week, from December 22nd through December 28th, if they wanted not to pay exempt employees for that week. – Adam K. Treiger
Adam Great information, and very timely. What if a business closes early on a weekday for their Holiday party, do the non-exempt employees have to be paid their hourly wage to attend the party?
If the holiday party is mandatory (or employees’ reasonably believe it’s mandatory), then yes, if the party is truly optional, then no. –Adam K. Treiger
It was my pleasure to be interviewed today by Yuki Noguchi of National Public Radio on the subjects covered by this blog post. My thanks to Yuki for the opportunity to be on NPR. –Adam K. Treiger