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On the heels of the Independence Day holiday, I received an email from a reader
asking for advice on how to handle the issue of paying employees for a national
holiday even if the office is closed or if a staff member normally has that day off.
Let's look at the recent Fourth of July as an example. It happened to fall on a
Wednesday and let's assume that the doctor does not see patients on
Wednesdays and most employees have that day off. The staff feels like they
should either receive additional pay for the holiday or receive another day off with
pay. The doctor believes that since Wednesdays are always a day off, there is no
indication for additional pay. This point of view is based on the thought that if the
office forces a person to be off work because it's closed, compensation is called
for, but if the person would have normally been off work anyway, no
compensation is due.
This issue also frequently occurs for staff members who have Mondays off,
because several national holidays fall on Mondays.
Policy is needed
This issue is a great example of why an office policy manual is important and the
type of information that should be included. If polices are in writing and known to
all parties in advance, a great deal of stress and tension is relieved. I have an
opinion on how to design the office policy on holiday pay, and I'll share that
below, but any policy is fair as long as it is known in advance. A policy may not
be popular, but if employees are hired on with a known set of rules or if they are
informed of a change in rules well in advance, one would be hard-pressed to
I recommend every practice owner begin to write an office policy manual and
store it on a computer hard drive. This document will continuously evolve, but it
can start with the basic rules about holiday pay, requests for days off, sick days,
vacations, dress code, and any other matters. It's best to write your own manual
from scratch; just start small, keep it simple and use plain English. Copies may
be printed and distributed when needed and additions and changes are easy to
make. As problems arise in the office and as resolutions are developed, just add
the new rules to the manual so they are not forgotten.
Since employee morale is so important and considering the high cost of staff
turnover, I like to offer some benefits that make employees happy. I've always
said that employees are like our internal customers and just as it's smart to cater
to patients, we must also market our practices to our staff. We compete with all
other employers when we try to attract and retain excellent employees. Of
course, there is a cost related to employment perks, and we each must use our
judgment as to when to draw the line, but I believe paid holidays are so common
today that it's hard to take a position against it.
A recommended policy
My practice pays all full time employees for six holidays per year no matter what.
The office is always closed on these holidays, but it doesn't matter if the
employee would normally have that day off or not. Even if the holiday falls on a
Sunday when we are closed anyway, the employee is paid extra for the holiday
in the next pay period. We use eight hours as the standard for the day (no
matter what the typical hours are for an individual on that day) and we multiply
that times the hourly wage. If the employee is on a salary basis, the six days are
provided off and no change is needed to the standard paycheck amount.
The six paid holidays are New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.
I don't offer (or demand) another day off without pay when a holiday falls on
someone's day off because the office generally needs more staff and I don't want
to reduce production or patient service. Trying to make up for the cost of the
holiday by giving another day off seems like a false economy to me. I'd rather
have the staff work and pay the extra money than do without them.
I offer very limited employment benefits to part time employees, so they do not
receive holiday pay. It's important for your practice to define full time and part
time in your policy manual. I define full time as any employee whose usual work
schedule (not the hours actually worked in a given week) is more than 32 hours
per week. Since I decide on the usual work schedule, I control who is considered
full time. I happen to prefer full time employees in general, but I don't want
employees changing status at will. Lunch periods are not included in the hourly
total for the week.