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Employers: Be clear on compensation over the holidays

The holidays will be over in a matter of weeks. But before that happens, retailers, restaurants and other businesses will likely contend with increased holiday traffic and unique staffing needs.

If you anticipate seasonal or holiday changes in your workforce and staffing requirements, it will be crucial that you have and enforce appropriate rules for workers. One especially important priority will be to understand your obligations in terms of compensation.

Holiday pay vs. overtime pay

Holiday pay is not the same as overtime. In Texas, employers will not need to pay employees overtime over the holidays unless an employee works more than 40 hours per week. In other words, working on a day like Christmas does not mean a person must receive overtime pay unless the employee has already worked 40 hours in that work week or the employer has agreed to pay the employee an overtime rate for work on holidays.

That said, employers should have in place policies that address holiday pay. You should have such a policy that clearly explains to workers whether they will be expected to work on holidays, whether they will receive time off (and if that time is paid or unpaid) and whether you will offer extra pay or other incentives for working on holidays.

It is crucial to understand that overtime pay is not optional: Employers must pay overtime to eligible employees who work overtime hours. Holiday pay, however, is discretionary. Keep in mind that you must comply with your own policies to avoid disputes. In other words, if you promise double pay for working on holidays in a contract, you must follow through with that promise.

Dealing with holiday disputes

If a situation arises and you and an employee do not agree on compensation or expectations over the holidays, legal disputes can result. However, having legal guidance as you navigate various conflicts and address employee concerns can make it easier to avoid costly litigation and resolve a situation more quickly. 

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