The Department of Labor provides clear guidance on the issue of holiday pay.

“The Fair Labor Standards Act does not require payment for time not worked, such as vacations, sick leave or holidays (federal or otherwise). These benefits are a matter of agreement between an employer and an employee,” the department said as it relates to nonexempt employees.

For employees exempted from overtime requirements — mostly white-collar positions for administrative, executive and professionals — if the employee is available to work, the employer must pay the exempt worker for the full week’s pay if the person works any part of that week.

The following scenarios explain the law’s intention. Of course, employers can pay above and beyond the law’s requirements, but understanding what is required at least gives employers a starting point.

Paying employees who work on the holidays: Employers are not required to pay premium pay, or overtime, for time worked by a nonexempt employee on a holiday, even when other workers are being paid by the employer that same day who are not working.

For example, if your employee works Christmas Day, you are not required to provide any extra pay for the day. Most employers will pay the employee the holiday pay, and then, in addition, pay for the worker’s hourly rate for the time that the employee works.

However, this added compensation is not required.

For exempt employees, employers are not required to, and probably shouldn’t, pay an hourly rate to the exempt employee who works on a holiday.

The law permits employers to give a bonus or some other form of compensation, but I discourage employers from tying the pay to the hours worked for exempt employees.

Overtime pay during the holidays: Determining a nonexempt employee’s “hours worked” for purposes of overtime pay does not include time for which the employee was paid, but didn’t work.

For example, if Sally takes off Christmas Day and is paid for eight hours as holiday pay, but works 10 hours each day for the remaining four days, Sally is entitled to be paid for 48 hours of straight pay, not 40 hours of straight pay and eight hours of overtime at time and a half.

This is because Sally was paid for the holiday, but didn’t work it.

However, if Sally works on the holiday and is also paid for the holiday, the hours counted toward the overtime pay would be the time actually worked during the week.

If Sally works 45 hours in the workweek, and receives an additional eight hours’ pay for the holiday, then she would be paid 48 hours of straight pay, and five hours of overtime pay, paid at time and a half the employee’s regular rate of pay.

Exempt employees are not entitled to overtime pay under any circumstances, so the overtime issue is not a consideration for employees properly classified as exempt from overtime.

Paying employees who are “on call” on a holiday: Non-exempt employees who are required to be “on call” during a specific day need only be compensated under certain situations.

“An employee who is required to remain on call on the employer’s premises is working while ‘on call.’ An employee who is required to remain on call at home, or who is allowed to leave a message where he/she can be reached, is not working (in most cases) while on call. Additional constraints on the employee’s freedom could require this time to be compensated,” the Department of Labor said.

For example, an employee who is told that he or she cannot drink alcohol and must return to the office within 20 or 30 minutes of being called is not so constrained that the time spent on call is compensable.

Of course, when the employee is called into work while on call, the employee is entitled to compensation for the working time.

Exempt employees are not paid hourly so the “on call” pay only applies to nonexempt employees.

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Employers should communicate with employees what they can expect regarding payment during the holidays.

Employers also should communicate how employees will be disciplined if they call out sick on a day during the holidays the employee is schedule to work.

This time of year can be quite busy, and offering as much flexibility and rewards as possible will help employees endure the stress of working, and managing personal obligations, during this time of year. Be generous, and hold those who fail to meet their commitments accountable.