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Calculating Overtime Pay with Vacation and Holidays   |    Free Pay Procedures Policy

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Q: If a nonexempt employee works a full 40-hour workweek and also takes a day of paid vacation or holiday, is the employee entitled to overtime pay?  Get your FREE access to this and 100's of FREE HR resources today.

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A: Not unless the employee actually works more than 40 hours in the workweek. According to the Fair Labor Standards Act, nonexempt employees must be paid overtime at time and one-half their regular rate of pay for all hours actually worked over 40 in a single workweek. Thus, in calculating how many hours a nonexempt employee actually works in a week, the employer does not have to count the paid vacation or holiday time towards the 40-hour workweek. For example, an employee normally works Monday through Friday, eight hours a day, and receives a paid holiday and does not work on the Monday. The employee then works Tuesday through Friday, eight hours a day, and is asked to work four additional hours on Saturday. The employee’s pay for the week would reflect a total of 44 paid hours, however since the employee actually worked only 36 hours, he would not receive any overtime pay.

 

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This article is not intended as legal advice. Readers are encouraged to seek appropriate legal or other professional advice.

 
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