All about holiday (vacation) pay in America

All about holiday (vacation) pay in America

by Adriana Stein

Updated November 7, 2022

It’s Monday, you’re all bright-eyed and bushy-tailed. You scroll through your phone to double-check your flight status. You gather your suitcase stuffed with bathing suits and sunscreen. Finally, it’s time to use that vacation time to relax.

In today’s guide, I’ll discuss everything you need to know about holiday pay in America so that you can fully enjoy your well-deserved time off.

Everything you need to know about vacation pay in America

Before you whizz off to the beach and start sippin’ pina coladas, it’s important to get all your ducks in a row at work (meaning to get everything in order). Whether you’re a freelancer, a full-time, or a part-time worker, this guide helps you navigate through your options and helps you understand the policies (or rather the lack thereof) put in place in the US when it comes to paid vacation time and holidays.

Important vocabulary words related to vacation and holiday pay in America

First, and foremost, let’s start with some American vocabulary words related to vacation and holiday pay:

  • Accrued Vacation Time: time-off that accumulates over a specified period of time
  • Paid Time Off (PTO): most commonly referred to as vacation time off but can also be used for sick or personal days off
  • Fair Labor Standards Act (FLSA): an American law that requires employers to pay overtime if applicable, and establishes a minimum wage age for workers to be abided by on a state and federal level.

A quick note on holiday vs vacation: there’s an important distinction between UK English and US English when it comes to the word “holiday”. While in the UK a holiday means both days like Christmas and Easter (public holidays), holiday also refers to the days where you take time off work. In the US, “holiday” only means public holidays and the time where you’re off work is referred to as a “vacation”. For the purposes of this article that focuses on US-specific policies, I’ll use the term “vacation” in reference to paid and unpaid time off.

Are there laws for paid vacation in the US?

It’s no secret that Americans are workaholics and 55% are still not using their paid time off. Depending on the state you live in and the company you work for, the amount of paid time off (paid vacation days) can vary drastically. 

On both a federal and state level in the US, vacation time is not legally required for employees. However, some companies do offer it to keep and attract talented employees. According to the Bureau of Labor Statistics, most Americans who have worked at a job for at least 5 years get an average of 15 days of vacation time versus those who have been with a company for 1 year who usually get around 11 days off. 

How do you know how much vacation time you have?

When you are fortunate enough to be given vacation time by your employer, these company policies are typically based on accrued time worked. If you’re a full or part-time employee, you should have been notified about how much vacation time (paid and unpaid) you get as part of your contract. If you’re unsure about this, check your contract first, and then reach out to your HR department for further assistance. 

Do employees receive paid public holidays in the US?

Here is a list of federal public holidays (not vacation time) observed in the US:

  • New Year’s Day
  • Martin Luther King Jr. Birthday
  • President’s Day
  • Memorial Day
  • 4th of July
  • Labor Day
  • Columbus Day
  • Veterans Day
  • Thanksgiving
  • Christmas Day

Unfortunately, private sector companies (those not under the control of the government) are not legally required to allow public holidays as unpaid vacation days. And even if they do provide them as days off, they’re not required to be paid either. 

In fact, even those working as part of emergency care units, like nurses and doctors, or also retail industries businesses are often asked to work on public holidays like normal.

If you’re unsure about whether you are allowed to take vacation days (paid or unpaid) on public holidays, your best bet is again to contact your HR department.

The biggest differences between America and Germany

Do freelancers get paid vacation in the US?

Freelancers, now it’s your turn. As an independent contractor, you exist solely as your own entity, meaning you are a small business. With that said, you’re able to give yourself time off whenever you please, but it would be best to have a clear communication strategy with your clients that explains when you’ll be out of office in order to plan accordingly. 

Despite this, 92% of US freelancers claim they can’t take a non-working vacation. And because of blurred lines between work and play as digital nomadism becomes more prevalent, it can be difficult for freelancers to ever take time off. To avoid this, freelancers need to put aside a savings fund solely for vacation time to your recharge batteries, and come back feeling refreshed and rejuvenated. 

On a final note, while the legal situation for paid vacation time in the US is quite bleak at the moment, it is slowly but surely improving. As larger companies like Google develop better paid vacation policies and employees realize the benefits that the majority of other countries in the world have, the situation in the US is taking baby steps to improve.

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