Labor Day honors American workers, but do employers have to provide paid time off or premium pay on this day? The HR Digest breaks down federal and state laws, answers “Do employees get holiday pay for Labor Day?”, and offers expert advice for HR professionals on managing holiday policies in 2025.
We’ve witnessed how holiday pay policies can impact employee morale, retention and even compliance. Labor Day, observed on the first Monday in September, celebrates the endless contributions of American workers. But a common question often arises: Do employers have to offer holiday pay on Labor Day? The short answer to this question is “No,” if you’re looking at Federal Law. However, there are state exceptions and best practices to consider before you brush off paying your employees on Labor Day. In this guide, we’ll address key questions such as, “Is Labor Day usually a paid holiday?” and “Is Labor Day a double pay day?”
Do employers have to offer holiday pay on Labor Day? It’s a tricky question that requires a closer look at federal and state guidelines. (Image: Pexels)
Do Your Employees Get Holiday Pay for Labor Day?
As per the Fair Labor Standards Act (FLSA), administered by the U.S. Department of Labor, there is a baseline for wage and hour laws in the U.S. More importantly, the FLSA does not mandate that private employers provide paid time off (PTO) for holidays, including Labor Day.
So, what does this mean for employers? Employers are not required to pay employees for time not worked on Labor Day. This also means that employers aren’t obligated to offer premium pay (such as time-and-a-half or double time) for those who do work.
Holiday benefits, such as paid days off, are typically a matter of agreement between the employer and employee. These are usually outlined in collective bargaining agreements for unionized workplaces.
On the other hand, federal employees do receive paid holidays, with Labor Day treated as a standard paid day off for non-essential government workers.
Now, here’s the tricky part. Overtime rules still apply in certain conditions. If working on Labor Day pushes an employee’s total hours over 40 in a workweek, standard overtime pay (1.5 times the regular rate) is required under FLSA.
However, Labor Day itself isn’t a “double pay day” unless your company policy specifies it.
State Variations on Holiday Pay for Labor Day
While federal law doesn’t require it, some states have their own rules that could affect “pay on Labor Day.” For example:
Rhode Island: Employers must pay non-exempt employees 1.5 times their regular rate for working on Labor Day and other holidays, unless the business is exempt (e.g. certain seven-day operations).
Massachusetts: Premium pay requirements vary by industry. Retailers may need to pay 1.1 times the regular rate for work done on Labor Day. Moreover, some businesses require permits to operate on holidays.
States such as California don’t mandate holiday pay, but require overtime if hours exceed daily or weekly thresholds.
You can always check with your state’s labor department for specifics. In most case, the answer to “Do I have to offer a paid holiday on Labor Day?” remains no for private employers.
Is Labor Day Usually a Paid Holiday?
Labor Day is one of the most commonly observed paid holidays. According to Bureau of Labor Statistics data, about 91% of civilian workers receive paid time off for Labor Day. Why? Offering paid holidays can boost employee engagement, reduce burnout and align with the spirit of honoring workers!
Here’s how you can handle holiday pay for your company.
Review company policies: Document holiday pay in your employee handbook. Specify if Labor Day is paid, whether premium pay applies for working employees, and any eligibility rules.
Consider equity: Part-time or intermittent workers may not qualify for paid holidays under FLSA guidelines.
Handle payroll logistics: If payday falls on Labor Day, some states require payment on the prior business day. Banks are closed, so plan direct deposits accordingly.
Union considerations: In unionized environments, holiday pay is often negotiated in contracts.
FAQs Addressing Common Questions on Labor Day Pay
Do employees get holiday pay for Labor Day?
No. Although it’s up to employer policy, except in states like Rhode Island or Massachusetts.
Is Labor Day a paid holiday?
For federal workers, yes. As for private sector employees, it’s common but not required.
Is Labor Day a double pay day?
Only if your policy or state law mandates premium pay. Federally, Labor Day is treated as a regular day.
In short, while employers don’t have to offer holiday pay on Labor Day under federal law, doing so can strengthen your workforce strategy. Use this as an opportunity to review your total compensation and rewards package.
Happy Labor Day, and may it be a restful one for your team!