Work out what a paid holiday costs — the rate, the worked-holiday premium, whether those hours push a driver into overtime, and what the whole policy runs per year across your fleet.
Per-stop and daily-rate drivers have no hourly rate, so most ISPs use average daily earnings.
Everything except the holiday itself.
11 federal holidays exist; most ISPs pay 5–7.
Holiday rate
$27.13
per hour
Pay for this holiday
$217.00
not worked
No overtime this week. Paying a driver for a holiday they did not work never pushes them into overtime, because unworked hours are not hours worked. Payroll systems that simply add 8 hours to the timecard get this wrong and overpay.
FleetWage separates worked hours from paid-not-worked hours automatically, so holiday pay never inflates the overtime threshold and true premiums get credited correctly.
Holiday pay looks like a simple multiplication until overtime enters the picture. These are the rules that change the answer.
No federal law requires private employers to pay for holidays, worked or not. The FLSA governs minimum wage and overtime, not paid time off. Holiday pay is a benefit you offer to compete for drivers — which means the real question is not whether you owe it, but what it costs and how it interacts with overtime.
FLSA — no paid-holiday mandate
If a driver is paid 8 hours for Thanksgiving and does not work, those 8 hours are not hours worked. They do not count toward the 40-hour overtime threshold and they are excluded from the regular rate. A driver who works 36 hours and gets 8 holiday hours is paid for 44 hours and owed no overtime.
29 CFR 778.218
Extra pay at a rate at least one and a half times the regular rate, paid because the work fell on a holiday, is excluded from the regular rate. Better still, it can be credited against any overtime premium you owe that week. Pay 1.25× instead and you lose both benefits: it becomes ordinary wages that push the regular rate up.
29 CFR 778.203
There is no hourly rate to multiply. Most ISPs use average daily earnings — typical weekly gross divided by days normally worked — which is defensible, easy to explain to drivers, and scales with the route. Whatever you pick, write it into the handbook and apply it identically to every driver.
Policy choice, not a legal requirement
A per-stop driver earns $1,085 across 36 hours Monday through Friday, then gets 8 hours of holiday pay for Thanksgiving at the average daily rate of $217. Here is what two payroll systems produce from identical inputs.
| Line | Holiday hours added to timecard | Holiday hours kept separate |
|---|---|---|
| Hours on the timecard | 44 worked | 36 worked + 8 holiday |
| Hours toward the 40-hour threshold | 44 | 36 |
| Overtime hours | 4 | 0 |
| Regular rate | $1,302 ÷ 44 = $29.59 | $1,085 ÷ 36 = $30.14 |
| Overtime premium owed | $59.18 | $0.00 |
| Weekly gross | $1,361.18 | $1,302.00 |
$59.18 per driver per holiday. Across 12 drivers and 6 paid holidays that is $4,261 a year in overtime nobody was owed — paid out because the timecard could not tell the difference between an hour worked and an hour paid. Note the regular rate moves too: folding holiday pay into earnings drags it down from $30.14 to $29.59, which understates every other premium that week. It runs the other direction as well — fleets that hand-adjust for this sometimes strip out real overtime by mistake, and that is the version that ends up in a wage claim.
This page explains general FLSA rules and is not legal advice. State law can impose additional requirements, and your own handbook may commit you to more than the law does. Confirm your policy with an employment attorney before changing it.
FleetWage tracks paid-not-worked hours separately from worked hours, credits true holiday premiums against overtime, and keeps the record straight for every driver and every CSA.
Regular rate and half-time premium for per-stop, daily, and hourly drivers, week by week.
Read more →
Gross-to-net estimate for a driver's week, including withholding and employer cost.
Read more →
Peak dates, holiday coverage, surge pay, and the payroll traps that show up in November and December.
Read more →
FLSA overtime, exemptions, regular-rate determination, and state-specific rules.
Read more →
Why a non-discretionary bonus raises the overtime premium you owe that week.
Read more →
What actually keeps drivers — and where paid holidays sit against pay and schedule.
Read more →