Global Work Glossary

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Who is eligible for paid holiday?

What is the rate of holiday pay?

What is paid holiday

Paid holiday is a type of leave given to a worker by a hiring company that allows workers to take time away from work while continuing to receive an income. 

Like other forms of leave (sick leave, maternity, paternity, parental leave, carer’s leave, etc.), paid holiday varies worldwide. Each country has its different legislation and different holiday entitlements.

In the UK, paid holiday is known as statutory or annual leave and enables eligible workers to take paid time off (PTO) to recharge and disconnect from work. Employers can choose to include bank and public holidays such as Good Friday, Early May Bank Holiday, and Christmas Day as part of a worker’s paid holiday allowance. However, many businesses treat public holidays and statutory leave as separate leave entitlements.

In the US, some employers voluntarily provide eligible workers with paid holidays in addition to vacation days and sick leave to enable them to take a paid day off to observe federal and state holidays and religious holidays.

Federal holidays designated by the federal government include:

  • New Year’s Day

  • Martin Luther King, Jr. day

  • Washington’s Birthday (also known as President’s Day)

  • Memorial Day

  • Juneteenth National Independence Day

  • Independence Day

  • Labor Day

  • Columbus Day

  • Veterans’ Day

  • Thanksgiving Day

  • Christmas Day.

Instead of dictating particular paid holidays, employers can choose to provide a set number of floating holidays. Floating holidays are paid days off that employees can use to observe national and religious holidays and cultural events that aren’t on the company calendar without using their vacation time.

Companies should list the holidays they recognize in their employee handbook. 

Employers must consider many factors when calculating holiday leave entitlements, including the region, the country, the worker’s seniority, the number of days worked, and the length of the worker’s employment. It’s also important to consider that some countries grant workers extra leave depending on when their public holiday falls.

In the UK, by law, almost all workers are entitled to 5.6 weeks of paid holiday annually. That includes salaried full-time employees and part-time employees, agency workers, workers with irregular hours, and workers on zero-hours contracts.

However, in the US, paid holiday time is not governed by federal law or state law. Employers can choose whether or not to provide paid days off as an employee benefit. The Department of Labor’s Fair Labor Standards Act (FLSA) only regulates minimum wage and overtime pay.

According to the U.S. Bureau of Labor Statistics, in 2021, 79% of US civilian workers had access to paid holidays.

In Austria, workers are entitled to 25 days of paid annual leave and 13 public holidays, bringing the total number of paid holiday to 38 days.

What is the rate of holiday pay?

Again, holiday pay varies according to local employment laws, individual company policies, and terms of employment. 

Workers typically receive at least their regular rate of pay during their paid holiday. However, employers can choose to increase pay to double-time and a half if they wish. Employers must pay a holiday bonus in some countries, such as Mexico and Brazil.

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