Paid Holidays in Alabama (2024 Guide For Employers)

Even though there is no federal law mandating that Alabama business owners have to provide paid holidays, many savvy business owners take the time and effort to provide them. This can be credited to the numerous benefits, since offering paid holidays keeps a business competitive in a job market, allows full-time employees time to rest and come back into work more productive, and can even save your business money in some unexpected ways.

That said, managing paid holidays is a delicate act. Doing it poorly could not only land you on the wrong side of labor law compliance, but also result in some suboptimal practices that cost your business more than it has to.

In this guide post we’ll cover anything and everything relevant to Paid Holiday Management, including topics such as:

  • An overview of Paid Holidays
  • How Paid Holidays impact the public sector vs the private sector
  • Federal vs State Holidays
  • Alabama-specific Paid Holidays
  • The Benefits of Offering Paid Holiday Time
  • Other FAQs
  • How Buddy Punch helps you conquer Paid Holidays.

What is a Paid Holiday?

A paid holiday is a religious, state, or national holiday that Alabama employers have eligibility to grant employees. If they do so, that means employees will be compensated a full day’s worth of wages for their day off. The U.S. Department of Labor makes it clear that there is nothing in the Fair Labor Standards Act (FLSA) that requires a business owner to provide any paid holidays off.

So why do many Alabama business owners offer paid holidays anyway? There are a couple of reasons:

  • Offering paid holidays means a sweeter benefits package, which can attract high-quality talent to any business
  • Paid holidays give employees time off to relax, improve work-life balance, and give staff time to hang out with friends and family members
  • After workers return from their days off, they’re usually more physically and mentally prepared to be productive.

All in all, offering paid holidays benefits both employers and employees.

Who do Paid Holidays apply to?

We should clarify that the Fair Labor Standards Act only excludes Private Employers/Businesses from needing to provide vacations. On the other hand, public employers are required by employment law to provide paid holidays. Public sector employers include agencies working at the municipal, state, or federal level. These are taxpayer-funded organizations that tend to provide services to the public, such as law offices or some universities.

That said, once a private employer chooses to offer paid holiday time (via their employment contract, PTO policy, or some other documentation) they are then required to stick to the parameters they outline.

Federal Holidays

The list of all 2024 federal holidays to be observed (regardless of what state you’re in) and the date they fall on is as follows:

  • New Year’s Day (Monday, January 1)
  • Martin Luther King, Jr.’s Birthday / Civil Rights Day / Robert E. Lee’s Birthday (Monday, January 15)
  • George Washington’s Birthday / Thomas Jefferson’s Birthday’s Day / President’s Day (Monday, February 19)
  • Memorial Day (Monday, May 27 – Last Monday in May)
  • Juneteenth National Independence Day (Wednesday, June 19)
  • Independence Day (Thursday, July 4)
  • Labor Day (Monday, September 2)
  • Columbus Day / Fraternal Day / American Indian Heritage Day(Monday, October 14)
  • Veterans Day (Monday, November 11)
  • Thanksgiving Day (Thursday, November 28)
  • Christmas Day (Wednesday, December 25)

Some of these federal laws have different names or commemorations that are specific to Alabama (for example, MLK Day serving to also celebrate Robert E. Lee’s birthday).

Note: there are a few rules that apply to all holidays. For example, if a holiday falls on a Saturday, employees are given the Friday before the holiday off. If a holiday happens to land on a Sunday, employees get a day off the following Monday.

Holidays Specific to the State of Alabama

As a reminder, there is no federal or state law that requires business owners to offer these days off if they’re a private business. However, for public state employers, there are rules that have to be adhered to. For example, Mobile and Baldwin Counties celebrate Mardi Gras as a legal holiday, meaning all state offices are closed in observance. Employees receive full holiday pay for these dates.

Impact of Common Alabama Leave Laws

While we’re observing the overall impact of paid holidays on work hours, let’s take a look at Alabama’s Labor Laws.

Sick Leave

State employees are meant to receive 4 hours of sick leave for each biweekly service period.

Holiday Leave

Private employers may establish a PTO policy or employee contract that disqualifies employees from payment of accrued vacation time upon “separation from employment” whether from quitting, discharging, or layoff. Employers can also disqualify employees from using their accrued paid time off if they fail to comply with specific requirements, such as giving two weeks’ notice or being employed as of a specific date of the year.

That said, if an employer has in their PTO policy or contract that they’ll pay out accrued vacation time upon separation from employment (which many business owners offer since it’s an attractive feature for would-be employees) they are required to do so.

Compensatory Leave

If a state office decides to remain open throughout a designated holiday, Alabama law dictates the office has to provide employees with a day of compensatory leave. Employees must then attempt to use this leave in the same calendar quarter it was awarded. If they are unable to, they must be compensated at a rate that is not less than their regular rate of pay for the unused time, and their supervisor has to explain in writing to the Alabama State Personnel Board why the leave was not granted. In lieu of payment, employees may request that the compensatory time be carried past the end of the quarter (up to one year).

Bereavement Leave

All state employees may be granted bereavement leave for the death of a person related by blood, adoption, or marriage, or as otherwise provided for by the Alabama State Personnel Board. For any one occurrence, the bereavement leave shall not exceed three days. Any bereavement leave granted to an employee must be reimbursed to the state in the form of leave days, including sick leave, annual leave, and personnel leave, within one calendar year of the bereavement leave.

If an employee leaves state service before repaying any bereavement leave used, they shall have the leave deducted from their final paycheck.

Parental Leave

As of this post’s writing, eligible Alabama employees are entitled to leave for:

the birth and care of a child born to that employee during the first year after the child’s birth; and

the care of a child placed with the employee in connection with adoption within one year of the placement of the child with the employee

These employees are entitled to up to 12 weeks of unpaid leave, which runs concurrently with FMLA leave (Family and Medical Leave Act).

However, according to the Alabama Reflector, there was a new law signed recently that may extend this.

The Alabama House of Representatives approved a bill that would extend up to eight weeks of parental leave to state employees.

They would receive 100% of their pay under this bill and continue to receive benefits such as health insurance and retirement. This bill will have to be ratified in the Senate and by the Governor before it would go into effect at a later date.

The Benefits of Paid Holidays

With so many different rules coming into effect depending on the type of paid holiday or leave being offered, you may wonder why private business owners would bother at all. After all, it’s all optional. However, we think it’s not only important for Alabama business owners to consider offering paid holidays, but also ultimately more profitable for them to do so. The reasons for this are:

#1 – Paid Holidays Make Your Business More Competitive

Job markets across the nation and across industries saw drastic changes in the wake of the pandemic. Workers prioritized their physical and mental health above everything, a trend especially noted among companies employing Gen-Z workers and Millennials. According to a survey by Deloitte, only 34% of Gen-Z and 31% of Millennials say they’re satisfied with their work-life balance, which is, at least, up from the 2019 numbers.

Key to maintaining the sort of work-life balance that employees are increasingly valuing is breaks, making paid holidays a core component of this emerging tenant. Offering generous PTO policies allows your business to stand out, attracting high-quality talent that you can then pick and choose from based on who would be the best fit for your workplace culture and productivity goals.

#2 – Paid Holidays Boost Company Morale

This benefit is a healthy side-bonus to an improved work-life balance for your employees (which comes naturally when you’re offering them paid holidays to recuperate). Company morale at your business will be higher due to team members being able to take time to themselves long enough to keep things in order in their personal life. Not to mention that just the act of offering paid holidays can improve how team members look at your company.

According to data collected and organized by the Pew Research Center, 35% of quitting workers in 2021 cited working too many hours. 45% specifically pointed a finger at lack of flexibility in their hours, while 43% of quitting workers said a lack of good benefits (health insurance and paid time off) drove them to leave their companies. Rather than risking your company being one of these examples, you can provide employees with the reprieve they’re signaling that they need.

#3 – Paid Holidays save your company in the long run.

Some business owners, particularly small business owners, may be hesitant about providing too many paid holidays since that means paying an employee’s full day of wages despite them not working. However, as we hinted at above, paid holiday time can contribute to an improved employee retention rate at your company. The longer your team members stay in your employ, the more efficiently they can complete tasks. In contrast, having to replace a team member that quits due to overwork or stress will cost you time and money when it comes to training their replacement.

Additionally, according to the Pew Research Center, 46% of U.S. workers use less paid time off than they’re offered. This means that employers can enjoy the benefits of offering enough PTO to stay competitive without it necessarily being a guarantee that their employees will use up all the vacation time they accrue.

All these long-term benefits add up to one conclusion: holiday pay is worth the cost.

Use Buddy Punch to Stay on Top of Paid Holidays

Keeping track of approaching paid holidays in addition to accruing vacation hours and daily employee time can seem like a complicated ask, but there are ways to make it easy. For example, you can make use of automatic time tracking & employee vacation accruing software options to handle many of these tasks. Workforce management solutions like our very own Buddy Punch have numerous features to help you stay on top of team members, such as full PTO management.

With Buddy Punch’s Paid Time Off Management, you can use basic PTO types or create custom PTO types at will, based on the type of leave management you want to do. Whenever a team member sends in a leave request, you can set it up so that you and/or administrators receive an alert to approve or deny them. Additionally, you can enable a completely self-service approach to PTO for individual team members. With this feature on, trusted team members will be automatically approved for time off they request.

Note, this is just one feature Buddy Punch offers, and specifically for time off management. There’s also the numerous time tracking, employee scheduling, and even built-in payroll functions that our time tracking tool has to take your workforce management to the next level.

If you’re interested in the potential of Buddy Punch to help you manage your team members, take a look at our many Paid Leave features. Otherwise, click here to learn more about Buddy Punch’s other options.

Paid holidays can take some reading and planning to understand on a state and federal level, but they’re worth the time investment as they’re an underrated key to optimizing your business in the long run. Additionally, making use of software options can make it a lot easier to handle.

Frequently Asked Questions

So, offering PTO of any kind is optional in Alabama?

Yes, if you’re a private employer. There is no law of any kind that requires an Alabama business to provide PTO.

Do Alabama Businesses have to pay out unused PTO if an employee quits or is terminated?

No. Alabama employers only have to pay out unused vacation time, sick leave, or other paid time off options if their PTO policy or employment contract specifically states as much.

Do employers tend to offer employees all 11 paid federal holidays?

According to a survey conducted by Zippia, the average U.S. employees receive 7.6 paid holidays. The two most common paid holidays are Thanksgiving and Christmas, while President’s Day and New Year’s Eve are the two least common.

How much is Holiday Pay?

Holiday pay is equal to an employee’s basic rate of pay.

What is Alabama’s minimum wage?

As of 2024, Alabama has not adopted a state minimum wage. That means the minimum wage across the state is equivalent to the federal minimum wage (currently $7.25 per hour). You can keep up with changes in minimum wage or payroll laws via our post here.

Official State Resources

Disclaimer: Not Legal Advice

This blog post provides a general overview of Alabama Holiday & Paid Leave Laws but does not constitute legal advice. Laws and regulations are subject to change, and there may be additional requirements or exemptions that apply to specific situations. Employers and employees should consult a qualified labor law attorney for advice on their specific circumstances.

If you have any questions about your rights or obligations as an employer or employee in Alabama, it is essential to consult with a labor law attorney to receive accurate information and guidance tailored to your situation. By seeking professional legal advice, you can ensure that you are taking the appropriate steps to comply with labor laws and protect your rights.

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