Holiday Pay Act
- Sponsor
- Rep. McBride, Sarah [D-DE-At Large]
- Committees
- Education and Workforce Committee (primary)
- Last action
- May 21, 2026
Bottom line
This bill establishes a federal requirement for premium pay for work performed on legal public holidays, extending protections similar to overtime pay to holiday work for private sector employees.
What it actually does
This bill amends the Fair Labor Standards Act of 1938 (FLSA) to mandate that employers compensate employees who work on a legal public holiday at a rate of at least one and one-half times their regular rate of pay. It defines "legal public holiday" by referencing existing federal law and integrates this new compensation requirement into the FLSA's enforcement, prohibited acts, and exemption provisions. The bill also clarifies that this federal mandate does not preempt state or local laws offering higher holiday pay.
Proponents argue
Proponents argue this bill ensures fair compensation for employees who sacrifice their holidays to work, recognizing the value of their labor during times when most others are off. They contend it would boost worker morale, provide a financial incentive for holiday work, and align with the principle of premium pay for work performed under special circumstances, particularly for essential workers.
Opponents contend
Opponents might argue that this mandate would significantly increase labor costs for businesses, particularly small businesses and those in industries that operate 24/7 or experience high demand on holidays. They contend this could lead to reduced staffing, increased prices for consumers, or fewer employment opportunities, and that holiday pay should be a matter of employer-employee negotiation or state law, not a federal mandate.
The bill is short and straightforward, allowing ample time for an informed reader to understand its provisions.
Section 2(a)(1), amending FLSA Section 3
Defines 'Legal Public Holiday'
This provision adds a new definition to the Fair Labor Standards Act, specifying that a 'legal public holiday' refers to any holiday listed in section 6103(a) of title 5, United States Code. This ensures consistency with federal holidays already recognized for federal employees, providing a clear and established list of days for which premium pay would apply under the new mandate.
Supporters argue
Supporters would argue that a clear, federally recognized definition prevents ambiguity and ensures uniform application of holiday pay across states and industries, making compliance easier for employers and understanding simpler for employees.
Critics contend
No specific opposition is typically raised against the definition itself, but rather to the underlying mandate it supports.
Tradeoffs
Ensures clarity and consistency by tying the new mandate to a specific set of federal holidays, potentially excluding other locally or culturally significant holidays not on the federal list.
Section 2(a)(2), inserting new FLSA Section 8
Requires Time-and-a-Half Pay for Holiday Work
This core provision establishes that employers must compensate employees who work on a legal public holiday at a rate of not less than one and one-half times their regular rate of pay. This applies to employees engaged in commerce or in the production of goods for commerce, or employed by an enterprise engaged in such activities, mirroring the existing scope of FLSA coverage.
Section 2(b), amending FLSA Section 7(h)(2)
Holiday Pay Not Creditable Towards Overtime
This amendment clarifies that the premium pay received for working on a legal public holiday (as required by the new Section 8) cannot be credited by employers towards any overtime compensation owed to the employee under existing FLSA Section 7. This prevents employers from double-counting holiday premium pay to satisfy both holiday and overtime pay requirements, ensuring distinct premium payments.
Sections 2(c), 2(d), 2(e), 2(f)
Conforming Amendments for Enforcement and Exemptions
These sections make several technical amendments to the FLSA to integrate the new holiday pay requirement into the existing framework. This includes adding the new Section 8 to the list of sections covered by exemptions (Section 13(f)), prohibited acts (Section 15(a)), and enforcement mechanisms (Sections 16 and 17). It also clarifies that state or local laws providing higher holiday pay or compensation for other holidays are not superseded by this federal act.
Amends FLSA Section 7(h)(2) to specify that the premium pay for holiday work (required under the new Section 8) cannot be used by employers to satisfy their overtime compensation obligations under Section 7.
Section 2(b)
Why it matters:This is standard legislative practice for ensuring proper integration of new provisions into existing complex statutes like the FLSA, preventing unintended interpretations or loopholes where employers might try to double-count premium payments.
Case for: Supporters argue this ensures employees receive distinct premium pay for both working holidays and working overtime, preventing employers from double-counting a single premium payment to fulfill two separate legal obligations. This maximizes worker benefit and reinforces the purpose of each premium.
Case against: Critics might argue this adds further complexity to payroll calculations and increases the cumulative labor cost for employers who might already be paying premium rates for holiday work, potentially disincentivizing flexible scheduling or increasing administrative burdens.
Estimated impact: Ensures potentially millions of employees receive separate premium pay for holiday and overtime work, increasing overall labor costs for employers who require both types of premium work.
Amends FLSA Section 18 by adding a new subsection (c), explicitly stating that the Act does not excuse noncompliance with any Federal or State law or municipal ordinance that establishes a higher rate of compensation for holiday work or requires compensation for other holidays.
Section 2(e)
Why it matters:This is standard legislative practice to clarify the relationship between federal law and existing or future state/local laws, preventing unintended preemption and preserving local authority where appropriate, ensuring the federal mandate acts as a floor, not a ceiling.
Case for: Proponents argue this provision is crucial for preserving states' rights to enact stronger worker protections, ensuring that the federal minimum is a floor, not a ceiling, for holiday pay. It allows states and localities to respond to local economic conditions or cultural practices.
Case against: Opponents might argue that this creates a patchwork of regulations across different jurisdictions, increasing compliance complexity for businesses operating in multiple states or municipalities, potentially hindering economic efficiency and creating an uneven playing field.
Estimated impact: Ensures that state and local governments retain the ability to mandate higher holiday pay or compensation for additional holidays, potentially leading to varied labor costs and worker benefits across the country.