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Holiday Pay, Overtime, and Bonus Questions Answered by USDOL
The Fair Labor Standards Act does not require payment for time not worked, such as vacations or holidays (federal or otherwise); these benefits are generally a matter of agreement between an employer and an employee (or the employee's representative), the U.S. Dept. of Labor says. If the holiday is worked, premium pay is not required unless the employee has actually worked over 40 hours in the designated workweek.
On a government contract to which the labor standards of the McNamara O'Hara Service Contract Act (SCA) apply, holiday and/or vacation fringe benefit requirements are stated in the SCA wage determinations in contracts that exceed $2,500.
On a government contract to which the labor standards of the Davis-Bacon and Related Acts apply, holiday pay and/or vacation pay is required for specific classifications of workers only if the Davis-Bacon wage determination in the covered contract specifies such requirements for workers employed in those classifications.
If the company is awarding holiday bonuses, it should check whether the bonus might have to be included in the regular rate for overtime calculation purposes. FLSA regulations expressly recognize that non-discretionary bonuses must be included as part of an employee's "regular rate," DOL says.