This year Christmas falls on a Sunday.  We have received a number of inquiries from clients about whether the holiday is to be observed on Sunday or on Monday and how they should pay employees.

The following advice applies only to non-exempt employees. Exempt employees do not receive extra pay for working on designated holidays unless your policies promise them additional pay.

Retail Employees

Under Massachusetts law, if a holiday falls on Sunday, it is to be observed the following Monday.  In addition, in Massachusetts, retailers must close on Christmas.  Therefore, retail stores must close on Sunday, December 25, 2011.  Retailers may be open on Monday, December 26, 2011, the “observed holiday”, but must pay employees time and one half for that day.

Non-Retail Employees

For non-retail employers, your established holiday policy will govern whether you will be open on Monday and how your employees will be paid.

For example, if your handbook or policy states that employees who work on a holiday will be paid time and one-half, any employee who works on Christmas Sunday will be entitled to time and one-half.  However, you will not be required to pay employees who work on Monday time and one-half.  On the other hand, if you designated December 26 as the Christmas holiday for 2011, you should pay employees who work on Monday the amount you pay employees who work on a holiday.

This advice is based on Massachusetts law, if you have employees in other states, please feel free to contact us for advice based on your state’s laws.