Service Contract Act: Holiday Pay Issues

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Service Contract Act holiday pay Alabama employment law
Make sure that you comply with the Service Contract Act’s holiday pay provisions.

Happy Holidays!! For my friends in the government contracting world, this post is a quick reminder that nothing is ever easy when dealing with the federal government and employees.  In particular, you need to make sure to comply with the holiday pay requirements of the Service Contract Act.  Here are some key reminders from the Service Contract Act regulations on holiday pay, found at 29 C.F.R. 4.174.

  1. Employees receive holiday pay if they perform any work during the workweek that a holiday occurs.
  2. Unless a different standard is used in a wage determination, a full-time employee who works on the holiday must be paid, in addition to the amount he ordinarily would be entitled, the cash equivalent of a full-day’s pay up to 8 hours or be furnished another day off with pay.
  3. An employee who performs no work during the workweek in which a named holiday occurs is generally not entitled to the holiday benefit.  But, if the employee does not work because he is on paid vacation or sick leave, he may be entitled to the benefit.
  4.  Holiday pay benefits cannot be denied because the employee did not work the day before or the day after the holiday, unless such qualifications are specifically included in the determination.
  5. There is an interesting quirk for newly hired employees. A contractor generally is not required to compensate a newly hired employee for the holiday occurring prior to the hiring of the employee. However, where a named holiday falls in the first week of a contract, all employees who work during the first week are entitled to holiday pay for that day. For example, if a contract to provide services for the period January 1 through December 31 contains a fringe benefit determination listing New Year’s Day as a named holiday, and if New Year’s Day is officially celebrated on January 2 in the year in question because January 1 fell on a Sunday, employees hired to begin work on January 3 would be entitled to holiday pay for New Year’s Day.
  6.  A full-time employee who is eligible to receive payment for a named holiday must receive a full day’s pay up to 8 hours unless a different standard is used in the fringe benefit determination.  Thus, for example, a contractor must furnish 7 hours of holiday pay to a full-time employee whose scheduled workday consists of 7 hours. An employee whose scheduled workday is 10 hours would be entitled to a holiday payment of 8 hours unless a different standard is used in the determination.

 

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