Does Holiday Pay Count Toward Overtime Hours in Texas?

Does Holiday Pay Affect Your Overtime in Texas?

Key Takeaways: Holiday pay does not count as “hours worked” when calculating overtime under the FLSA, which controls in Texas. Only actual hours worked push you past the 40-hour overtime threshold. Texas has no standalone overtime statute for private-sector employees and follows federal rules. Employers are not legally required to offer holiday pay, but written policies promising it are enforceable. If your employer miscalculates your overtime or excludes required compensation from your regular rate, you may have a legal claim.

If you work a holiday week and your paycheck looks smaller than expected, you are not alone. Many hourly and nonexempt salaried workers in Texas wonder whether holiday pay should count toward overtime. The short answer: holiday pay for time not actually worked does not count as “hours worked” under the Fair Labor Standards Act (FLSA). If you worked 32 hours and received 8 hours of holiday pay, your total is 40 compensable hours, but only 32 hours worked. You would not qualify for overtime that week.

If you believe your employer has been shortchanging your overtime, The Lore Law Firm can help. Call 866-559-0400 or request a free case evaluation today.

Why Overtime and Holiday Pay in Same Week Cause Confusion

The confusion starts because holiday pay and overtime pay can both appear on the same paycheck. Workers often assume all paid hours, including holidays, vacations, and sick time, feed into the 40-hour overtime threshold. Employers sometimes reinforce this misunderstanding with vague policies or inconsistent pay stubs. The FLSA draws a hard line between hours you actually work and hours for which you simply receive compensation.

Under the FLSA, overtime kicks in only when a nonexempt employee works more than 40 actual hours in a seven-day workweek. Holiday pay received for a day you did not work does not count toward that 40-hour trigger. Texas does not have its own standalone overtime statute for private-sector employees. Instead, overtime in Texas is governed by the overtime provisions of the FLSA (29 U.S.C. § 201 et seq.), and the Texas Payday Law (Texas Labor Code, Chapter 61) addresses how and when wages must be paid without creating a separate overtime entitlement.

💡 Pro Tip: Check your pay stub to see whether your employer lists holiday hours separately from hours actually worked. If lumped together, it becomes harder to verify correct overtime calculation.

How the 40-Hour Workweek Holiday Calculation Actually Works

The overtime threshold in Texas depends entirely on how many hours you physically worked, not how many hours you were paid for. Here is the breakdown:

In Scenario C, the employee earns overtime on 4 hours because they actually worked 44 hours. The 8 hours of holiday pay do not factor into the overtime calculation. In Scenario B, even though the employee received pay for 48 hours, they only worked 40 and do not cross the overtime threshold.

What Happens When Holiday Hours Push You Past 40 Total Hours

Texas Government Code § 659.015(f) addresses this for state employees. When a state employee does not work more than 40 hours but the combined total of hours worked plus holiday or paid leave hours exceeds 40, the employee earns straight compensatory time at a 1:1 ratio rather than overtime at 1.5:1. This applies only to state government employees, not private-sector workers. For private-sector employees, the FLSA does not require additional compensation when paid non-work hours push the total past 40; only actual hours worked over 40 trigger overtime.

FLSA Holiday Pay Rules You Need to Know

The FLSA does not require employers to provide holiday pay, period. It also does not require premium pay for working on a holiday, breaks, raises, or shift differentials. These are optional practices employers may offer based on company policy or competitive pressure. However, if an employer has a written policy promising holiday pay, Texas payday laws will enforce that written promise.

💡 Pro Tip: Request a copy of your employer’s written holiday pay policy. If the company promises holiday pay in writing but fails to deliver, you may have a wage claim under Texas law.

Holiday Pay Is Still a “Wage” Under Texas Law

Even though holiday pay does not count as hours worked for overtime purposes, Texas law recognizes it as wages when owed under a written agreement. The Texas Payday Law (Texas Labor Code, Chapter 61) defines “wages” broadly to include compensation owed under a written agreement with the employer, which can encompass promised holiday pay. This means your employer cannot refuse to pay holiday compensation promised in writing. However, being classified as a “wage” for compensation purposes differs from counting as “hours worked” for the FLSA overtime threshold.

This distinction trips up many workers. They see holiday pay listed as wages and assume it must count toward overtime. It does not. An employer must separately analyze whether holiday pay hours represent actual time worked when determining if the 40-hour overtime trigger is met.

Overtime and Holiday Pay in Same Week: What Your Employer Cannot Do

Your employer cannot use holiday pay as a tool to avoid paying overtime you have actually earned. Some employers manipulate the workweek by substituting holiday pay for actual hours worked, effectively masking the true number of hours on the clock. Others reduce scheduled hours during a holiday week so actual hours never exceed 40, even when workload demands more.

Under established Supreme Court precedent, any agreement between an employer and employee to waive minimum wage or overtime pay under the FLSA is void and unenforceable. Your boss cannot ask you to sign away your right to overtime, and you cannot voluntarily give it up, even for extra holiday pay or other perks. If you worked more than 40 actual hours in a workweek, you are entitled to time-and-a-half for every hour over 40, regardless of any holiday pay received that week. Note that while reducing scheduled hours during a holiday week to keep actual hours at or below 40 may be frustrating, it is not unlawful under the FLSA if the employer accurately pays overtime for all actual hours worked over 40.

💡 Pro Tip: Keep your own records of hours worked each day. A simple notebook or phone app can serve as critical evidence if a dispute arises. Learn more about how overtime is calculated to better protect yourself.

Federal Law Controls When State and Federal Rules Conflict

Where Texas state law and federal FLSA rules conflict, federal law controls. Texas Government Code § 659.015(b) states this directly for state employees subject to the FLSA. For private-sector employees, the FLSA applies as the primary overtime law because Texas has no separate state overtime statute creating additional private-sector overtime requirements. Even if a Texas employer points to a company policy to justify excluding holiday hours from overtime calculations, the FLSA’s definition of “hours worked” is the final word.

Signs Your Employer May Be Miscalculating Your Pay

Payroll errors involving holiday weeks are more common than many workers realize. Watch for these warning signs:

• Your pay stub does not separate holiday pay hours from hours actually worked

• You worked over 40 actual hours in a holiday week but received no overtime premium

• Your employer told you that holiday hours “replace” overtime hours

• Your regular rate calculation seems to exclude bonuses, shift differentials, or other non-discretionary compensation

If any of these situations sound familiar, explore whether you have a claim for holiday pay and overtime in the same week.

💡 Pro Tip: Nonexempt employees in industries like warehousing, healthcare, retail, and hospitality are particularly vulnerable to holiday week overtime errors. If you work in one of these fields, pay close attention to your holiday week paychecks.

Frequently Asked Questions

1. Does holiday pay count toward the 40-hour overtime threshold in Texas?

No. Under the FLSA, which governs overtime in Texas, only actual hours worked count toward the 40-hour threshold. Holiday pay for time not worked does not push you into overtime eligibility.

2. Can I earn overtime and holiday pay in the same week?

Yes. If you actually work more than 40 hours in a workweek that includes a paid holiday, you are entitled to overtime pay for every hour over 40. The holiday pay is separate compensation.

3. Is my employer required to pay me for holidays in Texas?

No federal or Texas state law requires employers to offer holiday pay. However, if your employer has a written policy promising holiday pay, that policy is enforceable under Texas payday laws.

4. Can my employer make me agree to give up overtime pay?

No. Under longstanding Supreme Court precedent, any agreement to waive overtime or minimum wage protections under the FLSA is void and unenforceable. You cannot legally waive your right to overtime pay.

5. What should I do if I think my overtime was calculated wrong during a holiday week?

Review your pay stubs and compare them against your actual hours worked. Gather any written policies your employer has about holiday pay. Then consider reaching out to an attorney who handles wage and hour claims.

Protect Your Right to Every Dollar You Have Earned

Holiday pay and overtime serve different purposes, and your employer should never confuse the two at your expense. Texas follows the FLSA for overtime purposes, and the federal rule is clear: only hours you actually work count toward the 40-hour overtime threshold. Holiday pay is a welcome benefit, but it cannot substitute for overtime compensation you have rightfully earned.

The Lore Law Firm is dedicated to helping workers recover unpaid overtime. If you suspect your employer has been miscalculating your pay, call 866-559-0400 or submit a free case evaluation to learn what options may be available to you.

Michael Lore

Founding Attorney

Michael Lore is the founder of The Lore Law Firm with over 25 years of experience in labor and employment law. He handles cases ranging from unpaid overtime and class actions to executive contracts and personal injury matters in courts nationwide.

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