Do you owe time and a half on Christmas? Holiday pay and call-out cover for restaurants

Only 39% of restaurant and hotel workers have paid holidays, against 81% across private industry. A holiday premium is how you stand out and fill the shifts nobody wants, so set it knowing what the law requires.

No federal law makes you pay time and a half, or anything extra, for working on Christmas Day, New Year's Eve or New Year's Day. The Fair Labor Standards Act (FLSA) requires time and a half only for hours over 40 in a workweek. A holiday premium is your policy, not a legal duty, unless a state or local rule or a contract says otherwise. This year Christmas Day and New Year's Day both fall on a Friday, so decide your policy before the December schedule goes up. Last checked: 5 November 2026.

Do you have to pay time and a half on Christmas Day?

No. The Department of Labor's FLSA FAQ says the FLSA "does not require payment for time not worked, such as vacations, sick leave or holidays (Federal or otherwise)", and that extra pay for weekend or night work "is a matter of agreement between the employer and the employee". The same page says the FLSA "has no requirement for double time pay".

What the FLSA does require, every week of the year, holidays included:

The tipped row comes from DOL Fact Sheet 15: "overtime must be calculated based on the full minimum wage", which is $7.25 federally. The manager row is the salary basis rule in 29 CFR 541.602: an exempt employee "must receive the full salary for any week in which the employee performs any work".

So "holiday pay" means two different things, and staff often mix them up. Paid time off for a holiday you are closed is a benefit. A premium for working the holiday is an incentive. Federal law requires neither.

Do any states require holiday pay for restaurant workers?

Rarely. Rhode Island is the one state where the answer is genuinely unclear for restaurants. Most state rules owners meet over the holidays are about hours, not holidays:

• Rhode Island. State law says work on Sundays and holidays "must be paid for at least one and one-half (1½) times the normal rate of pay", and refusing holiday work is not grounds for discharge (R.I. Gen. Laws § 25-3-3). The state's list of exempt employers (260-RICR-30-05-2, effective 17 August 2025) does not name restaurants, and we found no official statement on whether the rule reaches them. If you run a restaurant in Rhode Island, ask the Department of Labor and Training before you post the December schedule.
• Massachusetts. The retail premium for Sundays and holidays ended on 1 January 2023, according to the state's guide to working on Sundays and holidays, and restaurants have their own exemption to open on those days anyway.
• Daily overtime. California pays time and a half after 8 hours in a day and double time after 12, so a 12-hour Christmas Eve double costs more there whatever your holiday policy.
• Sending people home. If you cut a slow holiday shift short after staff arrive, California, New York and Massachusetts require reporting or call-in pay for hours not worked. Our snow day guide sets out each state's rule.
• Scheduling laws. Some cities require advance notice and pay for late changes. Our predictive scheduling guide covers who they reach.

Check your state and city labor department, and any union contract, for your situation.

How does a holiday premium affect overtime?

A holiday premium of at least time and a half can count toward the overtime you owe that week. Under 29 USC 207(e)(6) and (h)(2), extra pay "for work by the employee on Saturdays, Sundays, holidays" at a premium rate of at least one and a half times the normal rate is left out of the regular rate and is creditable toward overtime. Pay for a holiday not worked is left out of the regular rate too, under section 207(e)(2).

Worked example: a line cook earns $18 an hour and works 44 hours in the week of Christmas, including 8 hours on Christmas Day, which you pay at time and a half.

The $72 premium covers the $36 of overtime premium the FLSA requires. Without the holiday premium you would owe the $36 separately. Pay more than this and the cook simply earns more. California's daily overtime rules work differently, so run Christmas weeks there through your payroll provider. The same credit decides what goes on the cook's 2026 W-2 in box 12 code TT, which our no tax on overtime guide explains.

What do restaurants actually give staff for holidays?

Less than most employers, and most staff never get near 40 hours. This is our analysis of two Bureau of Labor Statistics series, retrieved 5 November 2026:

Sources: the National Compensation Survey series NBU20672000000000033073, NBU20600000000000033073, NBU20672000000000030074 and NBU20600000000000030074, and Current Employment Statistics series CEU7072200002, through the BLS public data API. In 2016 the paid holiday figure for the sector was 33%, so it has crept up, but it is still less than half the private-sector rate.

Two things follow. First, a paid day off or a holiday premium stands out in hiring, because six in ten workers in the sector have no paid holidays at all. Second, with an average week of 25 hours, overtime is not what makes Christmas expensive for most staff. The cost is the premium you choose and the call-outs you have to cover.

Holiday premium options, and what each costs

Price a premium before you promise it. Take a holiday dinner shift with 12 people on for 8 hours: 7 hourly back-of-house and support staff at $18, and 5 servers on a $2.13 cash wage under the federal tip credit.

The server line needs care. Time and a half on a $2.13 cash wage is $1.07 an hour, which staff will read as an insult. In the table, the servers' premium is half of the full $7.25 minimum, $3.63 an hour, which is $145 for the five of them. Whatever you choose, say it in dollars. Payroll taxes come on top of each line.

Add your state's rules before you choose. If your state bans the tip credit, servers earn the full state minimum, and a percentage premium costs more. Our tip credit guide lists the states.

How do you cover call-outs on Christmas Eve and New Year's Eve?

Post the holiday schedule early, decide the call-out premium in advance, and work down a fixed ladder instead of texting everyone at once. A schedule posted a couple of days before the shift gives staff no time to plan around it, so post the holiday weeks first. Then set a written trigger for the premium, for example time and a half for emergency cover once three or more people call out of the same shift.

A premium that is written down before the night is cheaper than one invented at 7am. It also avoids paying the person who covers more than the person who turned up as scheduled, without a rule behind it.

A holiday pay policy and call-out ladder you can copy

Edit the bracketed parts, have it checked against your state rules, and give it to staff with the December schedule.

HOLIDAY PAY AND CALL-OUT POLICY: [RESTAURANT NAME], 2026 to 2027

1. Holidays covered
   Christmas Eve (Thu 24 Dec), Christmas Day (Fri 25 Dec),
   New Year's Eve (Thu 31 Dec), New Year's Day (Fri 1 Jan).

2. Holiday premium (our policy, not a legal requirement)
   Hourly staff who work a scheduled shift on a covered holiday
   receive [time and a half on base pay / $__ per shift].
   Tipped staff receive [$__ an hour / $__ per shift] on top of
   their cash wage and tips.
   Overtime is paid as the law requires. A holiday premium of
   time and a half or more counts toward overtime for that week.

3. Closed days
   We are closed on [dates]. [Hourly staff are / are not] paid
   for closed days. Salaried managers receive their full salary.

4. Schedule and requests
   The holiday schedule is posted by [date, at least 3 weeks out].
   Time-off requests for holidays close on [date] and are decided
   by [seniority / rotation from last year / first come].

5. If you cannot work your shift
   Tell [manager] by phone at least [__] hours before the shift.
   A text alone does not count.

6. Call-out cover ladder
   Step 1: manager offers the shift to staff marked available.
   Step 2: if no one takes it within [30] minutes, offer it to
           cross-trained staff from other roles.
   Step 3: if [2] or more people are out on the same shift, the
           cover premium of [time and a half / $__] applies to
           whoever covers.
   Step 4: if still uncovered, the manager on duty covers and
           we adjust the floor plan or close a section.

7. No-call no-show on a covered holiday
   [Your rule, applied the same way to everyone.]

A written premium does not replace a religious accommodation request. If someone asks for a holiday off for religious reasons, federal law requires you to consider it; the EEOC's guidance on religious discrimination explains the test. This guide is general information, so check with an adviser for your situation.

Can TablePort handle this for you?

TablePort's Staff Management add-on covers the schedule side of this policy. It does not decide your premium.

1. Turn on the labor law presets for US federal FLSA, California or New York to get overtime warnings as you build the holiday weeks.
2. Publish the schedule weeks ahead. Staff get a private link, tap to acknowledge it, and can ask for open shifts or request time off from it.
3. When a call-out changes the plan, publish the change and choose to notify only the people whose shifts changed.
4. Staff clock in on the till with a PIN, so holiday hours are matched to the schedule and approved timesheets export as a CSV or in a format ready for Xero.

One honest limit: TablePort does not run payroll. The holiday premium is your policy, applied by your payroll provider. See the staff rota page.