Navigating holiday pay rules can feel like a maze, but don’t worry, we’re here to help you find your way. As a beauty and wellness business owner, understanding how holiday pay works isn’t just about keeping your finances in check; it’s also about keeping your team happy and motivated. Here, we’ll walk you through everything you need to know about holiday pay in the United States, from the nitty-gritty of federal laws to simple ways to calculate pay for your team. Whether you run a salon, spa, or any other self-care business, we’ve got you covered with tips to craft a holiday pay policy that fits your needs.

What Is Holiday Pay in Beauty and Wellness Businesses?

Holiday pay is a type of compensation given to employees who work on designated holidays or sometimes even when they don’t work but are granted paid time off. While it's common across many industries, holiday pay works a bit differently in beauty and wellness businesses, especially since many professionals are paid on an hourly or commission basis.

In beauty and wellness, holiday pay for hourly employees can be an essential benefit. It’s not just about rewarding your employees; it’s about showing that you value their time and hard work. For salons and spas, where customer bookings can be unpredictable, holiday pay can also help ensure that your team remains motivated and available to work during peak times, such as the holiday season. 

For example, if your spa is open on Thanksgiving, offering your hourly employees time and a half for working that day can be a great incentive. On the flip side, commission-based employees might appreciate a higher commission rate for holiday bookings. Either way, offering holiday pay can be a powerful tool to attract and retain top talent, ensuring your team feels appreciated and valued.

An Overview of Holiday Pay Laws in the United States

So, do small businesses have to pay holiday pay? The answer is not as straightforward as you might think. In the United States, holiday pay is not mandated by federal law. This means that, unlike minimum wage or overtime pay, there’s no legal requirement for employers to offer holiday pay. However, many states have their own regulations that may impact holiday pay, and it's important to stay informed about the specific rules in your state.

For example, Massachusetts has "blue laws" that regulate work on certain holidays, requiring some businesses to pay time and a half to employees who work on those days. Meanwhile, in states like California, holiday pay is more of a business decision left to the employer’s discretion. This flexibility allows you to tailor your holiday pay policies to fit your business’s needs and budget.

Just because holiday pay isn’t mandatory doesn’t mean it’s a bad idea. Many small beauty and wellness businesses choose to offer holiday pay as a way to stand out in a competitive job market. Offering this perk can make your business more attractive to potential employees, helping you build a loyal and dedicated team.

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Which Are the Federal Holidays in the US?

Understanding federal holiday pay laws is crucial when deciding on your policy. In the United States, there are 11 federal holidays, and while businesses aren’t required to close on these days, many do, or they may choose to pay employees a special holiday rate if they remain open. Here’s a list of the federal holidays you should be aware of:

• New Year’s Day (January 1): A time for fresh starts and resolutions, this holiday often sees salons and spas offering promotions or special packages.
• Martin Luther King Jr. Day (Third Monday in January): Some businesses use this day to honor Dr. King’s legacy with community service or charity events.
• Presidents’ Day (Third Monday in February): A slower time for many businesses, making it an opportunity to close or offer holiday pay to those who work.
• Memorial Day (Last Monday in May): Kicks off the summer season, which can be a busy time for beauty and wellness businesses.
• Juneteenth (June 19): Recognized as a federal holiday starting in 2021, this day commemorates the end of slavery in the United States.
• Independence Day (July 4): Many businesses close for the day, while others may offer special rates or promotions.
• Labor Day (First Monday in September): Marks the unofficial end of summer, and is a day off for many employees.
• Columbus Day/Indigenous Peoples’ Day (Second Monday in October): Some businesses observe this day with special events or discounts.
• Veterans Day (November 11): A day to honor military veterans, which some businesses may use to offer special deals for veterans.
• Thanksgiving Day (Fourth Thursday in November): A busy day for some, while others may choose to close and offer holiday pay instead.
• Christmas Day (December 25): Often a day off for most businesses, with many offering holiday pay if employees work.

Knowing these holidays can help you decide which days to include in your holiday pay policy. Whether you’re open or closed, having a clear plan will help avoid confusion, ensure your team knows what to expect, and help you take control of your finances throughout the year.

How to Calculate Holiday Pay for Your Beauty and Wellness Employees

Calculating holiday pay can vary depending on the type of employee you have. Let’s break it down:

Full-time beauty and wellness employees

For full-time employees, holiday pay is typically calculated based on their regular hourly wage. If you decide to offer time and a half for holidays, you would multiply their hourly rate by 1.5. For example, if a stylist earns $20 per hour, they would earn $30 per hour for working on a holiday.

Part-time beauty and wellness employees

Part-time employees should be treated similarly, but their holiday pay is usually prorated based on the number of hours they typically work. If a part-time receptionist usually works 20 hours a week, they might receive half of the holiday pay that a full-time employee would get.

Commission-based beauty and wellness employees

Commission-based employees, like many stylists or massage therapists, earn a percentage of the revenue they bring in. For holiday pay, you might consider offering a higher commission rate for services performed on holidays. For instance, if your usual commission rate is 40%, you could increase it to 50% for holiday work to incentivize them to work on those days.

Each of these methods ensures that your employees feel fairly compensated for their work during holidays, which can often be a hectic time in the beauty and wellness industry.

Can You Set Up Your Own Holiday Pay Policy for Your Beauty and Wellness Business?

One of the advantages of running a small beauty and wellness business is the flexibility to create policies that align with your specific needs and values. Setting up your own holiday pay policy allows you to consider your business’s financial situation, your employees’ preferences, and the overall culture you want to create.

When crafting your policy, think about the following:

• Which holidays will you include? You might decide to offer holiday pay only on major holidays like Christmas and New Year’s Day, or you could include other federal holidays depending on your business’s operational needs.
• What rate will you offer? Will you provide time and a half, double time, or a flat holiday bonus? Consider what your business can afford while still making the offer attractive to your team.
• How will you communicate the policy? It’s important to be transparent with your team about your holiday pay policy. Include it in your employee handbook, discuss it during staff meetings, and make sure everyone knows how it works well before the holiday season begins.

Creating a clear and fair holiday pay policy can help avoid misunderstandings and ensure that your team feels valued, especially during the busy holiday periods.

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3 Challenges Small Beauty and Wellness Businesses Can Face With Holiday Pay

Holiday pay can be a fantastic benefit, but it’s not without its challenges. Here are a few issues you might encounter as a small beauty and wellness business:

Limited financial resources

For smaller beauty and wellness businesses, finding the budget for holiday pay can be tough. Unlike larger establishments, which may have more robust financial resources, smaller businesses need to carefully manage every dollar. This can make it challenging to offer competitive holiday pay without straining your budget. 

Being honest and communicating with your employees about what the business can afford can go a long way! The most important thing is that employees know that you appreciate all their hard work. 

Revenue fluctuations

The beauty and wellness industry often experiences seasonal fluctuations in revenue. You might see a surge in clients during the holidays, but what about the quieter months? Budgeting for holiday pay can be difficult when your income isn’t consistent throughout the year. Planning ahead and setting aside funds during busier periods can help mitigate this challenge.

Staffing shortages

During peak holiday seasons, you may struggle to find enough staff to cover shifts, especially if some team members want to take time off to be with their families. This can lead to increased overtime costs or the need to pay premium rates for those willing to work on holidays. Balancing staffing needs with holiday pay costs requires careful planning and communication with your team.

By anticipating these challenges and planning ahead, you can create a holiday pay strategy that works for both your business and your employees.

Manage Your Employee Holiday Payments with GlossGenius

So while the answer to the question ‘do small businesses have to pay holiday pay’ is no, having a well-thought-out holiday pay policy is essential. GlossGenius offers an all-in-one solution for beauty and wellness business owners, helping you easily manage your team’s payments. With features like Instant Payouts, Team & Staff Management, and Payroll, you can ensure your employees are paid accurately and on time, every single time.

Don’t let the stress of holiday pay weigh you down. With GlossGenius, you can focus on what you do best—providing top-notch service to your clients. Ready to streamline your payment process? Start your free trial with GlossGenius today and see how we can help your business thrive during the holiday season and beyond.

Frequently Asked Questions About Holiday Pay

Navigating holiday pay can be confusing, so let's clear up some common questions.

By law in the United States, do small businesses have to pay holiday pay? 

No, holiday pay is not mandatory in the United States. Federal law does not require employers to pay extra for holidays or even to provide paid time off. However, many employers choose to offer holiday pay to attract and retain employees. It’s also worth noting that some states have specific laws regarding holiday pay, so always check your local regulations.

How many paid holidays do most companies give?

On average, companies in the United States offer around 7-10 paid holidays per year. These often include major holidays like New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. However, the exact number can vary depending on the industry and company size.

How do you pay for a holiday?

Paying for a holiday usually involves offering time and a half, double time, or a set holiday bonus. The specific method depends on your business’s policy. For hourly employees, you might multiply their standard hourly rate by 1.5 for time and a half. For commission-based employees, you could increase their commission rate for holiday work. Always make sure your employees are aware of how their holiday pay is calculated.

What is time and a half pay?

Time and a half pay means that employees are paid 1.5 times their regular hourly wage for hours worked on a holiday. For example, if an employee’s regular hourly rate is $20, time and a half would mean they earn $30 per hour on the holiday. This is a common way to incentivize employees to work on holidays, especially in industries like beauty and wellness where peak times often align with holidays.