Holiday Pay While on Leave: Your Complete Guide for 2025
Paid Family Leave and related leave laws play a critical role in helping employees balance work, health needs, family responsibilities, and unexpected emergencies. Whether you are navigating medical treatments, welcoming a new child, or managing care for a family member, understanding how paid leave, unpaid leave, and job protection rules work is essential. The complexity of overlapping programs such as FMLA, Paid Family Leave, Short-Term Disability, Workers’ Compensation, and state-specific requirements makes it important to know your rights and your employer’s obligations.
In California, employees have some of the strongest leave protections in the country. At Setareh Law, we help workers and employers interpret these laws, understand eligibility, avoid compliance mistakes, and handle issues such as holiday pay during leave, documentation rules, and benefit continuation. This comprehensive guide explains how each leave program works, how they interact, and what steps employees and employers should take to stay compliant.
Understanding Paid Family Leave and Other Employee Benefits
Paid Family Leave (PFL) and related employee benefits exist to support workers during major life events such as caring for a sick family member, bonding with a new child, or managing a serious health condition. These programs provide either wage replacement, job protection, or both, depending on the type of leave and the employee’s eligibility. Because California laws interact with federal rules like the Family and Medical Leave Act (FMLA), employees must understand which programs apply to their situation.
Beyond PFL, workers may also rely on Short-Term Disability, Workers’ Compensation, Parental Leave, PTO, or even Unemployment Insurance in limited cases. Each program has different qualifications, documentation requirements, and rights. Knowing how these benefits overlap helps employees make informed decisions and helps employers maintain compliance with state and federal regulations
What Is Paid Family Leave?
Paid Family Leave (PFL) is a state benefit that provides partial wage replacement to employees who need time away from work for family-related reasons. In California, PFL does not guarantee job protection on its own, but it often works alongside laws like FMLA or CFRA to secure an employee’s position. PFL is typically funded through employee payroll contributions, not employers. Its purpose is to give workers financial support during major life events such as caring for family members or bonding with a new child.
Paid Leave vs Sick Leave, Vacation, and PTO
Paid Family Leave is different from sick leave, vacation days, or general PTO. PFL provides income replacement for specific family-related situations, while sick leave is used for an employee’s own illness or medical needs. Vacation and PTO, on the other hand, are employer-provided benefits used for personal time, rest, or planned absences. Unlike PFL, these balances are controlled by employer policies. Understanding the distinctions helps employees choose the right type of leave and ensures employers apply each category correctly under California and federal law.
Common Reasons Employees Use Paid Leave
Most employees use Paid Family Leave to bond with a new child, care for a family member with a serious health condition, or provide support during military-related events. California also recognizes situations such as caring for aging parents, assisting a spouse after surgery, or managing long-term treatment schedules for close relatives. PFL is intended for times when an employee’s presence is genuinely needed at home. These absences typically come with medical documentation or proof of qualifying events to ensure compliance and proper benefit approval.
Employer Responsibilities Under Paid Leave Programs
Employers must ensure workers are informed about Paid Family Leave, provide required notices, and avoid any form of retaliation against employees who apply for or use leave. While employers do not pay PFL benefits directly, they must coordinate schedules, maintain accurate records, and ensure that protected leave laws like FMLA or CFRA are applied when appropriate. Employers also need to manage payroll reporting, verify employee eligibility, and update internal policies to align with state regulations. Clear communication and consistent handling of leave requests are essential to maintaining compliance.
Key Leave Programs
Employees in California may qualify for several different leave programs depending on their situation, each designed to support health, family needs, or job-related challenges. These programs work together to provide wage replacement, job protection, or both, but they are often misunderstood because each one serves a different purpose. Understanding how these programs interact such as when FMLA applies, when Paid Family Leave offers income support, or when Workers’ Compensation becomes relevant helps employees choose the right path and helps employers maintain compliance. This section outlines the most important leave programs workers rely on.
The Family and Medical Leave Act provides eligible employees with up to 12 weeks of job-protected, unpaid leave per year for qualifying medical or family reasons. In California, FMLA often runs simultaneously with CFRA, giving employees both job protection and continued benefits during leave. FMLA covers situations such as caring for a seriously ill family member, managing an employee’s own medical condition, or bonding with a new child. Employers must maintain group health benefits and ensure no retaliation occurs. Understanding FMLA is essential for employees managing health or family responsibilities.
Short-Term Disability
Short-Term Disability (STD) provides temporary wage replacement to employees who cannot work due to their own non-work-related illness, injury, or pregnancy-related disability. In California, many workers rely on State Disability Insurance (SDI), funded through payroll deductions. STD is not job protection, but it supports employees financially during recovery periods. Benefits are typically calculated as a percentage of weekly wages and require medical certification. STD often overlaps with FMLA or CFRA for job protection, particularly during pregnancy or after surgery. Understanding how STD interacts with other leave programs helps employees plan time away effectively.
Workers’ Compensation
Workers’ Compensation benefits apply when an employee is injured or becomes ill due to work-related conditions. These benefits include medical treatment, wage replacement through temporary disability payments, and job protection while recovering. Workers’ Compensation may overlap with FMLA if the injury qualifies as a serious health condition, allowing both wage support and job-protected leave at the same time. Employers must report injuries promptly, and employees are required to follow treatment and documentation procedures. Workers’ Compensation ensures employees receive necessary care while employers meet state-mandated responsibilities.
Parental Leave (Maternity, Paternity, Adoption, Foster Care)
Parental leave in California includes multiple protections and benefits for new parents. Workers may use FMLA or CFRA for job-protected bonding time and rely on Paid Family Leave (PFL) or State Disability Insurance (SDI) for wage replacement. This applies to birth, adoption, and foster placement. Maternity leave often begins with SDI for pregnancy disability, followed by PFL for bonding. Paternity and adoption leave typically start with PFL and CFRA. Together, these programs allow parents to combine job protection with income support, giving families time to adjust during major life transitions.
Sick & Vacation Time / PTO
Sick leave, vacation time, and PTO are employer-provided benefits that give employees paid time off for personal needs, illness, or rest. California requires employers to provide a minimum amount of paid sick leave, while vacation and PTO policies vary by company. These programs differ from Paid Family Leave because they offer paid time off directly from the employer rather than through state benefits. Employees can sometimes combine PTO with FMLA or medical leave, depending on employer policies. Understanding how these balances accrue and when they can be used helps employees avoid attendance issues.
Unapproved Leave: Policies, Attendance Points, and Consequences
Unapproved leave occurs when an employee misses work without following the employer’s attendance policy or without qualifying under a protected leave law. Many companies use attendance point systems to track violations, and repeated unapproved absences can lead to discipline or termination. However, emergencies or medical conditions may still qualify for protected leave under FMLA or CFRA even if paperwork is submitted late. Employers must apply policies consistently and avoid penalizing leave that should be legally protected. Employees benefit from understanding the rules and communicating quickly when unexpected situations arise.
Unemployment Insurance: Eligibility & Special Cases
Unemployment Insurance (UI) provides financial assistance to workers who lose their jobs through no fault of their own. In California, employees typically do not qualify for UI while still employed or on paid leave, but exceptions exist. Workers may qualify if they are medically unable to work for an extended period and shift to Disability Insurance, or if they are terminated for reasons unrelated to misconduct. UI also supports workers whose hours are significantly reduced. Knowing when UI applies helps employees navigate transitions between work, medical leave, and job-related challenges.
FMLA & Holiday Pay
Understanding how holidays interact with the Family and Medical Leave Act (FMLA) is essential for both employees and employers, particularly in states like California where multiple leave laws overlap. Holiday weeks often create confusion about eligibility, pay obligations, and how to count leave time especially when companies close for seasonal breaks or employees use intermittent leave. Federal law sets the baseline rules, but employers must ensure their policies remain consistent, documented, and compliant with both FMLA and state requirements.
How Holidays Affect FMLA Eligibility
Holidays do not change FMLA eligibility rules. Employees must still meet the standard requirements: 12 months of service, 1,250 hours worked in the previous year, and employment at a covered employer. Paid holidays do not count toward the 1,250-hour threshold, so being off for a holiday will not help or harm eligibility. Employers must evaluate eligibility based on actual hours worked, not paid time off. Understanding this distinction prevents confusion, especially when leave begins or ends near major holidays.
Do Holidays Count as FMLA Leave?
Whether a holiday counts against FMLA depends on how the employee is using leave. If the employee is taking continuous FMLA, the full week including the holiday typically counts as leave. But when leave is intermittent and the employee is not scheduled to work on the holiday, that day generally does not count as FMLA. The key factor is the employee’s work schedule, not the holiday itself. Clear policies help both employees and HR teams avoid disputes over how to count holiday weeks.
Company Shutdowns vs. Intermittent Leave
When a company shuts down for a full week such as during winter break those days usually do not count as FMLA leave because employees would not be expected to work. However, if the shutdown covers fewer than five days, it may still count depending on the employer’s normal schedule. For employees on intermittent FMLA, holiday shutdowns typically do not reduce their FMLA balance unless they were otherwise scheduled to work. Understanding these nuances helps avoid incorrect tracking and protects employees’ job-protected time.
Employer Responsibilities During Holidays
Employers must apply FMLA rules consistently during holidays, maintain accurate leave tracking, and ensure employees on approved leave are not treated differently than others. Holiday pay is not automatically owed to an employee on FMLA; payment depends on the employer’s policy for non-working employees and how the leave is being taken. Employers must also continue benefits, avoid retaliation, and notify employees when holidays affect FMLA calculations. Proper documentation and timely communication are essential to remain compliant with federal and California regulations.
Example Scenarios for Employees and Employers
Consider a worker on continuous FMLA during Thanksgiving week: the holiday counts as FMLA because the employee is already on full-week leave. In another case, an employee using intermittent FMLA for medical appointments may still receive holiday pay if they were scheduled to work and are not out that day. If a company closes for an entire week in December, employees on FMLA typically do not have that week subtracted from their FMLA balance. These scenarios help clarify how policies operate in real workplaces.
Paid Leave for All Workers Act (PLAWA)
The Paid Leave for All Workers Act (PLAWA) establishes a statewide requirement for employers to provide paid leave that employees can use for any reasonpersonal, family-related, or health-related. Unlike traditional sick-leave laws, PLAWA is purpose-neutral and applies broadly to nearly all employers and employees.
How Paid Leave Is Earned and Accrues
Under PLAWA, employees begin accruing paid leave from their first day, earning at least one hour for every forty hours worked. Exempt employees are generally treated as working forty hours per week. Employers may track accrual or frontload the full annual allotment. Employees typically become eligible to use leave after ninety days, and unused leave carries over to the next year unless frontloaded.
Paid Leave vs Sick Leave, Vacation, and PTO
PLAWA allows employees to use leave for any purpose without justification, unlike traditional sick leave, vacation, or PTO policies. While existing PTO or vacation plans may meet the law’s requirements, they must provide at least the statutory hours, allow flexible usage, and comply with carryover and anti-retaliation rules. Policies should be updated to reflect PLAWA’s broader protections.
Interaction with Existing Employer Plans
Existing PTO, vacation, or sick leave plans may comply if they meet PLAWA standards, including minimum hours, flexible usage, anti-retaliation protections, and proper accrual or frontloading. Employers must ensure leave can be used without documentation or explanation, and carryover rules are followed unless leave is frontloaded.
Pay Rate During Paid Leave
Employees on PLAWA leave are paid their regular hourly rate, including shift differentials but excluding overtime or bonuses. For variable pay rates, the weighted average of earnings is used. Leave must be included in the regular payroll cycle, benefits must continue, and employees must be reinstated to their prior or equivalent position upon return.
Employee Rights and Employer Responsibilities
Employees have clear protections under both federal and state leave laws, including FMLA and California-specific statutes. They are entitled to job-protected leave, continued health benefits, and the ability to use accrued paid leave without fear of penalty. These rights ensure employees can care for themselves or family members while maintaining employment security.
Employee Rights Under Federal and State Leave Laws
Employees are entitled to take leave for medical, family, or personal reasons as defined by federal and state law. They have the right to return to their same or an equivalent position, maintain health benefits, and access accrued paid leave without discrimination. Awareness of these rights helps employees plan absences responsibly and ensures their legal protections are respected.
Employer Compliance Requirements
Employers must maintain accurate records, apply leave policies consistently, and ensure all practices meet federal and state legal standards. Compliance includes properly tracking leave, providing notices, and integrating paid leave programs with existing PTO, vacation, and sick leave policies. Failure to comply can result in penalties, back pay, or legal action.
Retaliation Protections for Employees
Employees are protected from retaliation for using or requesting leave. Employers cannot demote, discipline, or terminate an employee for exercising their rights under FMLA, PLAWA, or other applicable laws. Clear anti-retaliation policies and consistent enforcement are critical to creating a safe and lawful workplace environment.
Best Practices for Handling Leave Requests
Employers should establish clear procedures for requesting leave, ensure timely communication, and educate managers on legal obligations. Prompt approvals, accurate tracking, and respectful handling of sensitive information help maintain compliance and foster employee trust. Providing guidance on proper documentation and usage promotes consistency and reduces disputes.
Why Choose Setareh Law for Leave and Holiday Pay Issues
Comprehensive Expertise in California Leave & Holiday Pay Laws
Setareh Law is one of California’s most trusted employment law firms, offering deep experience across FMLA, CFRA, Paid Family Leave, disability benefits, Workers’ Compensation, and the Paid Leave for All Workers Act (PLAWA). Because holiday pay issues often arise when these laws overlap, our attorneys provide clear guidance on eligibility, wage rights, job protection, and benefit coordination. Whether an employer has miscalculated holiday pay, denied leave, retaliated, or mishandled documentation, we help workers understand their rights and secure the compensation and protections they deserve.
Trusted Guidance for Employers Seeking Compliance
Employers also rely on Setareh Law to develop compliant policies, train HR teams, and prevent costly leave-law violations especially during holiday periods when errors are most common. We assist with accurate FMLA tracking, holiday pay calculations, shutdown-week rules, PLAWA implementation, and consistent enforcement of attendance and leave policies. By partnering with Setareh Law, organizations reduce legal risk, strengthen internal practices, and ensure employees receive fair, lawful treatment throughout their leave period.
Conclusion
Understanding holiday pay and leave laws is essential for both employees and employers to ensure compliance, protect rights, and maintain workplace fairness. California’s complex landscape of FMLA, CFRA, Paid Family Leave, PLAWA, and other programs can create confusion, especially during holidays or company shutdowns. By knowing eligibility, documenting leave properly, and understanding how different leave types interact, employees can safeguard their income, job protection, and benefits. Employers, in turn, can prevent disputes, avoid penalties, and foster a supportive and legally compliant work environment.
Setareh Law provides expert guidance for navigating these challenges, offering clear advice for employees seeking holiday pay during leave and employers aiming for compliance. From strategic planning and documentation to resolving disputes and ensuring fair treatment, our team helps all parties understand their rights and obligations. With proactive legal support, both employees and organizations can confidently manage leave, holiday pay, and benefits while maintaining a respectful, productive workplace.
Frequently Asked Questions
Q: Do holidays count toward FMLA leave?
Holidays generally do not reduce an employee’s FMLA entitlement. Whether a holiday counts depends on if the employee is on intermittent leave or if the company is closed. Employees on paid leave during a holiday still maintain their FMLA protections without affecting their total leave balance.
Q: Am I entitled to holiday pay while on leave?
Employees on paid leave, including FMLA or state-mandated paid family leave, are usually entitled to their regular holiday pay. If leave is unpaid, holiday pay may not apply unless company policy or state law provides otherwise.
Q:How does paid leave interact with holidays?
When a holiday falls during paid leave, employees typically do not need to use PTO or other accrued leave for that day. Policies vary, but most employers credit the holiday separately to avoid reducing the employee’s accrued leave balance
Q: Can I combine different types of leave during a holiday period?
Yes, employees can combine FMLA, PLAWA, PTO, and state-specific paid leave around holidays. Leave for multiple purposes is protected, and employers must track each type accurately to ensure compliance with both federal and state regulations.
Q: Can employers require documentation for leave taken around holidays?
Employers may request documentation for FMLA leave to verify eligibility, but under PLAWA, employees are not required to provide a reason for using paid leave. Documentation rules should be applied consistently and in accordance with the law.
Q: How does leave during holidays affect benefits and job protection?
Paid leave and FMLA leave during holidays do not negatively impact accrued benefits. Employees are guaranteed job protection, meaning they return to the same or an equivalent position after leave.
Q:Can I take partial days of leave during holidays?
Most leave laws, including FMLA and PLAWA, allow employees to take leave in increments, such as half-days, around holiday periods. Employers must follow their stated policies consistently and ensure proper tracking.
Q: Am I protected from retaliation for taking leave during holidays?
Yes, employees are protected from any form of retaliation, including demotion, discipline, or termination, for taking legally protected leave during holidays. Anti-retaliation policies should be clearly communicated and enforced uniformly.
Q: Can employers impose attendance points for absences during holidays?
Employers cannot penalize employees with attendance points for absences during protected leave periods, including holidays. Any disciplinary system must comply with federal and state leave laws to avoid violations.
Q:How should employers communicate holiday leave policies?
Clear communication is key. Employers should provide written policies detailing leave accrual, usage, and holiday pay rules. Consistent training and documentation ensure compliance with FMLA, PLAWA, and state-specific laws while reducing misunderstandings or disputes.
Take the Next Step
Contact an experienced California employment attorney today for a free case evaluation. Learn whether you have a valid WARN Act claim and what compensation you might be entitled to receive. You have nothing to lose and potentially significant compensation to gain.
This information is provided for educational purposes and does not constitute legal advice. Each case is unique, and outcomes depend on specific facts and circumstances. Consult with a qualified California employment attorney to discuss your individual situation.
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