Paid Holidays | Meaning and Definition

What are Paid Holidays? 

Paid holidays involve religious, national, or state holidays that employers may choose to offer as paid days off from work to the employees. The Fair Labor Standards Act solely regulates overtime pay and minimum wage; however, there is no federal rule that asks employers to give paid holidays to employees. 

Importance of paid holidays

Paid holidays just like vacations are deemed as important employee benefits. Several employees expect time off and these holidays as part of their job benefits. Certain studies done on the subject revealed that employees mainly choose such benefits over higher pay. If a company offers more time for vacation, an employee will likely choose it over even if it is a lower-paying job. After vacation time, the two factors that rank high are health benefits and flexible work hours which are preferred by the employees. The owners of enterprises have also now come to recognize the importance of time off for their employees who list it as one of the top benefits. 

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Benefits of giving paid holidays

Providing paid holidays not only benefits the employees but it is beneficial for employers too. Giving it provides several benefits to employees.

Some of the benefits of providing these holidays to employees are:

1. Reduce absenteeism

When an employer offers paid holidays as a part of their employee benefits it helps to reduce employee absenteeism. As an employer this can help you to call out your team when an important project has to be completed in a short span of time. This ultimately benefits the employer as it reduces the employee absenteeism rate.

2. Increases employee productivity

Providing paid leaves to employees helps to increase their productivity at work as employers get a break from their hectic work life. This helps them to perform even better at their workplace. Hence providing paid leaves to employees helps employers to increase organizational performance and productivity.

3. Reduce burnout

Job burnout refers to a special type of work-related stress- a state of physical and emotional exhaustion that involves reduced productivity and loss of personal identity. 

Job burnout is harmful to organizations as it reduces employee productivity.

Providing these holidays to employees helps to reduce burnout among employees thereby organizational productivity remains unaffected.

4. Improves employee experience

Providing paid holidays to employees helps organizations improve the employee experience. Employees are the brand image of your organization. So it’s necessary to keep your employees happy so that a positive image of your company can be created in the market. Also, employees meet a lot of people in their social network, and to ensure that they should be positive while talking about your company, it’s necessary to provide them.

5. Increases employee retention rate

Hiring is one of the most important and cost-consuming processes for an organization. In order to ensure the best and talented pool of organizations stays with them for a long time, it’s necessary to provide them with paid holidays or offs. 

Providing employees with appropriate these holidays helps to reduce employee churn rate.

6. Improves work-life balance

Providing employees with adequate offs helps them to maintain their work-life balance. Employees with better work-life balance prove to be more productive for the organizations.

Although employers are not responsible for maintaining the work-life balance of employees, still providing them holidays helps to improve their productivity as well.

7. Competitive advantage

If an organization wants to attract a quality workforce they should provide competitive advantages to their employees as they can’t compete every time in salary so they should provide competitive advantages such as paid time offs to their employees.

This could impact an applicant’s decision to work with certain organizations.

How much paid leaves are provided in a year?

The number of paid holidays provided to employees varies from organization to organization depending on their leave rules. However an employer can refer to the following figures for reference before making their own leave rule

  • The average number in India is 15
  • There are 14 federal holidays
  • The Factories Act of 1948 stipulates that each worker or employee who has worked at least 240 days in a calendar year is entitled to 12 working days of paid leave or annual leave.

What all holidays are paid in India?

Some common paid holidays provided to employees are:

  1. New Year’s Day
  2. Easter
  3. Memorial Day
  4. Independence Day
  5. Labor Day
  6. Thanksgiving Day
  7. The day after Thanksgiving
  8. Christmas Day

Frequently Asked Questions(FAQs)

They involve religious, national, or state holidays that employers may choose to offer as paid days off from work to the employees. The list of paid holidays varies from organization to organization depending on their work culture.

According to the Factories Act of 1948, each worker or employee who has worked at least 240 days in a calendar year is entitled to 12 working days of paid leave or annual leave. This is the minimum criteria set by the government which every organization should follow.

New Year’s day, Thanksgiving Day, Christmas Day, Labour day etc, are some common types of paid holidays. They are country-specific, which means they can vary from country to country. If an employee is working these days, he will get holiday pay from his employer.

Indian employees get 15 days of paid leave each year and they are allowed to carry 30 paid leaves over the next year. This means that Indian employees have 2 years to take up to take every day of paid leave to accrue to the next year.