Restaurant holiday scheduling, overtime and holiday pay

The holiday weeks are when a restaurant schedules the most hours, runs the most people across more than one role, and is least likely to look closely at a timecard. Most holiday payroll problems are not about a rule nobody knew. They are about a week nobody added up until it was already paid.

What federal law does and does not require

The U.S. Department of Labor states it plainly: the Fair Labor Standards Act “does not require payment for time not worked, such as vacations or holidays (federal or otherwise).” Holiday pay is generally a matter of agreement between the employer and the employee.

Working on a holiday does not, on its own, earn overtime under federal law either. The DOL’s overtime guidance says the FLSA “does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.”

What the FLSA does require, for covered, non-exempt employees, is overtime for hours worked over 40 in a workweek, at a rate not less than time and one-half the regular rate of pay.

State and local rules can go further

Federal law is the floor. States and cities can add requirements of their own, and they differ from place to place. This page does not summarize Massachusetts or any other state’s holiday, premium-pay or scheduling rules. Before you set holiday pay terms or schedule holiday shifts, confirm what applies to your restaurant with qualified counsel. For the Massachusetts figures this site does track, with their sources and review dates, see Massachusetts restaurant payroll basics.

Overtime is counted by the workweek

The holiday rush is where two federal overtime points trip restaurants up most.

• The workweek is fixed. DOL defines it as “a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods.” It does not have to match the calendar week, but it cannot move to suit a busy schedule.
• No averaging. “Averaging of hours over two or more weeks is not permitted.” A 50-hour week before Christmas is not cancelled out by a 30-hour week after it.
• Every role counts. A server who also picks up bar shifts or expo has all of those hours in the same workweek. Where someone works at more than one rate, the regular rate used for overtime has to reflect that. Confirm the calculation your payroll provider applies rather than assuming.

A holiday scheduling checklist

1. Decide your holiday pay policy before you schedule. If you offer holiday pay, a premium for holiday shifts, or a paid day off, write down who qualifies and how it is calculated. If you do not, say that too.
2. Put it where staff can see it. The written policy, usually in the handbook, should match what the floor is told. The handbook guide covers keeping the two aligned.
3. Check projected hours mid-week. Look at hours per person across every role while there is still time to adjust the rest of the week, not after it closes.
4. Flag anyone heading past 40. Treat it as a scheduling decision to make on purpose, not a surprise to find at approval.
5. Make sure timecards match the role worked. Hours clocked under the wrong role move pay to the wrong rate, and the error is invisible on the totals.
6. Review before you approve. Run the full payroll approval checklist on holiday weeks especially.

Tips over the holidays

Busy weeks mean more tips to declare and distribute. Under IRS rules, employees report cash tips to the employer by the 10th day of the month after they receive them, unless their tips with that employer total less than $20 for the month. December’s reports therefore arrive in January, which matters when you are closing the year. The tipped-payroll workflow covers reconciling POS tips and declarations before each run, and the year-end payroll checklist covers what happens next.

Where BOHO fits

On payroll coordination, BOHO assembles the inputs for each run, raises exceptions such as unexpected overtime or missing tip declarations as specific questions, and prepares the run for your named approver. Your restaurant sets the holiday pay policy, makes the scheduling decisions, and approves every payroll.

What this is not

This is general operational information, not legal or tax advice. Holiday pay, premium pay and overtime can turn on state and local law and on facts specific to your restaurant and your staff. Confirm your treatment with qualified counsel and your payroll provider.