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If your company chooses to recognize holidays, you want to be sure that you have a written policy which specifically details what the company intends to provide and to whom.
Courts and California analyze holiday pay policies as if they are contracts. Basic contract law states that if an agreement is vague or ambiguous, such that it is capable of more than one interpretation, it will be interpreted in the manner that favors the party that did NOT draft the agreement.
What this means is that if you have a holiday policy that doesn’t address all circumstances, the court or the California Labor Commissioner will rule in favor of your employees.
At a minimum, your policy would need to explain what will happen if an employee is required to work on a day that you designate as a paid holiday.
In addition, you would want to explain what will happen if the designated holiday falls on a day that the business is closed, and/or when an employee is not scheduled to work.
You would also want to explain what, if any, prerequisites you require of your employees before they are eligible to receive the holiday pay.
Once you have drafted your policy, we highly recommend that you have legal counsel review the agreement with you to be sure that it contains all the information necessary to convey your company’s intent related to the holiday pay.
Read more about Holidays in the HR Library.