Ten Things About American Labor Law（7）Can U.S. Public Holidays Be Ignored?

In China, workers enjoy double/triple pay for working on Labor Day or National Day. But in the "economically advanced" U.S., why do holidays like Thanksgiving and Christmas lack similar protections? Why is the much-touted paid time off (PTO) often treated as optional? If an employer offers 10 days of annual leave, can I save them for three years and take a month-long vacation?

Those familiar with U.S. workplaces know its leave system contradicts intuitive expectations—yet reveals a cold logic upon closer inspection.

10 Things About U.S. Labor Law: The Employer-Employee Power Play
By Xiaoxiao Liu, Corporate Attorney in Silicon Valley | Decoding the Legal Realities Behind American Work Culture

1.Public Holidays

To understand the vacation system in the United States, it’s important to remember one general principle: neither public holidays nor paid annual leave is mandatory in the U.S. What did you say? How can it still be called “public holidays” then? In fact, these so-called public holidays are only applicable to government employees. For private companies, employers have no obligation to grant employees time off on these days, nor are they required to provide paid leave. In other words, whether it’s Thanksgiving or Christmas, these days are treated like any other normal day. Employers can still require you to work and pay you the usual salary.

You might wonder, then, why many companies are closed on these days? The main reason is that private companies choose to close to show care for their employees. Additionally, since government offices are closed, many services are unavailable.

Below is a table of federal and California public holidays, along with the percentage of private companies that offer paid leave on these days. As you can see, aside from the well-known holidays, there are still many that private employers are unwilling to cover. According to the official statistics from the U.S. Bureau of Labor Statistics in 2023, the average private-sector employee in the U.S. has 7.6 paid public holidays per year, which is somewhat generous.

Incidentally, it’s worth noting that the Lunar New Year is now considered a public holiday in California, mainly due to the large Chinese population there. However, this was only passed in 2022, so there are no statistics available yet.

2.Paid Time Off

After understanding the issue of public holidays and seeing how “capitalism exploits surplus value,” let’s take a look at how “corrupt” capitalism can be when it comes to paid time off.

First, remember one major principle: there is no federally mandated paid time off in the United States. Whether to offer paid leave is entirely up to each company. Isn’t that corrupt enough? Wait, there’s more. It gets even more complicated once a company decides to offer paid time off. Let’s see just how corrupt it can get.

2.1 The Troubles of Paid Time Off for Employers

The first trouble is that paid time off is equivalent to wages. On the surface, this might not seem so bad, but when you dig deeper, you’ll realize it’s not as simple as it sounds. This means:

• For those hardworking, long-serving employees who never take a day off, if you offer them 10 days of annual leave, they can request that these 10 days be converted into wages. You cannot force employees to use their benefits only in the form of “taking time off.”

• If an employee works diligently for three consecutive years without taking a single day of paid leave and then resigns, they can demand that the company pay them for the 30 days of unused leave. In other words, you can’t have a “use it or lose it” policy.

• There must be no discriminatory treatment when it comes to paid time off. For example, if you give one engineer 10 days of annual leave, you can’t give another engineer only 5 days.

2.2 The Troubles of Paid Time Off for Employees

But do you think companies are completely powerless when it comes to managing paid time off for employees?

No. Companies do have some ways to control it:

• Companies can require employees to coordinate with the HR department to determine the specific days they will take off. This prevents everyone in the company from taking time off at the same time, which could cause the entire company to grind to a halt.

• Companies can set an upper limit on the accumulation of paid time off. As mentioned earlier, you can’t have a policy where unused leave is forfeited at the end of the year. However, the law allows companies to set a cap on the total number of hours, such as 180 hours (equivalent to 22.5 days, roughly a month’s worth of workdays). Once employees reach this limit, they must use some of their leave to reduce their balance; otherwise, they can no longer accrue more time off. This might seem like a different way of achieving the same result, but it’s still more humane than simply resetting the balance to zero each year.

• While companies can’t discriminate among employees in the same position regarding paid time off, they can differentiate based on job level or position. For example, junior employees might not have any paid leave, mid-level employees might get 10 days, and management might get 15 days. Part-time employees can also be excluded from paid time off policies.

You might think this is already complicated enough. The legislative regulations around these rights essentially give both employees and employers some weapons and shields, allowing them to engage in a battle of wits. Well, you’re right on the mark.

All of this leads to the common choice for most startups: not offering paid time off at all. Instead, they might offer bonuses as rewards, and approve time off based on the company’s workload. However, for companies that have reached a certain scale, it would look bad not to offer some basic paid leave. So, they might reluctantly implement a paid time-off policy despite the hassle. According to the official statistics from the U.S. Bureau of Labor Statistics in 2023, the average paid time off in the Western states, including California, is 9.4 days, and it often increases with tenure. The table below shows the varying amounts of paid time off based on years of service.

10 Things About U.S. Labor Law: Stories of Employers and Employees

I'm American lawyer Liu Xiaoxiao and we'll see you next time.