Not legal advice. This is a plain-English overview of federal rules plus common practice. Wage and hour law varies by state and depends on the facts. Check with your payroll provider or an employment attorney before you change how you pay.
Quick answer (November 2026)
Federal law doesn’t require holiday pay. The Department of Labor says the FLSA “does not require payment for time not worked, such as vacations or holidays,” and doesn’t require a premium for working on a holiday either. What it does require is overtime at time and a half for hours over 40 in a workweek for non-exempt employees, and that applies on holiday weeks like any other.
- On-call at home is generally not work time if the tech is free to use the time for their own purposes. On-call that keeps them tied down can be.
- Answering the call is work time, and a night call-out to travel a substantial distance for an emergency job counts the travel too.
- States can require more, like California’s daily overtime.
- The real challenge is fairness: a rotation published early, with clear rules, keeps your best techs from burning out over the holidays.
On this page
From Thanksgiving through New Year’s, the phones don’t take holidays. Furnaces quit on Christmas Eve, drains back up the day after Thanksgiving (see Brown Friday), and somebody always gets locked out on New Year’s night. Someone has to answer, and someone has to roll a truck.
Holiday on-call is where trade owners get tripped up twice: once on the law, and once on fairness. Get the pay wrong and you have a wage claim. Get the schedule wrong and your best tech quits in January. Here’s how to handle both.
What federal law requires (and doesn’t)
| Question | Federal answer (FLSA) |
|---|---|
| Do I have to give paid holidays? | No. Paid time off for holidays is a matter of agreement between employer and employee. |
| Do I have to pay extra for working on a holiday? | No. A holiday is a regular workday under federal law. |
| Does overtime still apply on a holiday week? | Yes. Non-exempt employees get time and a half for hours over 40 in the workweek. |
| Is on-call time paid? | It depends on how restricted the employee is (see below). |
| Is time spent on a call-out paid? | Yes. Time spent working is work time. |
Federal law is the floor. Your own policy, your offer letters, a union contract, or state law can all require more. If you’ve promised holiday pay, you have to pay it.
Holiday premium pay and overtime
Many trade companies pay a holiday premium anyway, because it’s the only way to get people to volunteer. If you do, how much you pay matters for overtime math:
- Under 29 CFR 778.203, a premium of at least time and a half for work on holidays, weekends, or regular days off can be credited toward overtime owed for that week and kept out of the regular rate.
- A premium below time and a half doesn’t get that treatment. It has to be added into the regular rate, which raises the overtime rate for the week.
- A day off given arbitrarily because work is slow isn’t a “holiday” for this rule.
This is technical. If you pay holiday premiums or on-call stipends, have your payroll provider confirm how they flow into overtime.
When on-call time counts as work
The federal rule, 29 CFR 785.17, draws the line like this:
- An employee required to stay on call at the employer’s premises, or so close that they can’t use the time effectively for their own purposes, is working while on call.
- An employee who just has to leave word where they can be reached is not working while on call.
Most trade on-call falls in the second group: the tech is home, carries the phone, and can live their life. But the more you restrict them, the closer you get to paid time. Things that push it that way:
- Very short response-time requirements, like rolling within 10 minutes.
- Calls so frequent the tech can’t really do anything else.
- Rules that keep them from leaving home, drinking a beer, or traveling at all.
Courts look at the whole picture, so keep on-call rules as light as the business allows.
Call-outs and travel time
- Time spent on the call is work time, including phone troubleshooting with a customer.
- Night travel to an emergency job counts. Under 29 CFR 785.36, if an employee who has gone home for the day is called out at night to travel a substantial distance to an emergency job for a customer, all of that travel time is working time.
- Track it properly. Start and end times for each call-out, so the hours land on the timesheet and overtime is calculated right.
- Minimum call-out pay (paying a set minimum for any call-out) is common in the trades. How it affects overtime math is technical; ask payroll.
Take-home vans and commuting
Techs on call usually take the van home. Under the federal Employee Commuting Flexibility Act, an ordinary commute in a company vehicle generally isn’t paid time, as long as the commute is within the normal commuting area for your business and the vehicle use is part of an agreement with the employee. Emergency night call-outs are the exception covered above. Keep your take-home vehicle policy in writing; it also helps with theft rules (see van and tool theft).
State rules that go further
Several states add rules on top of federal law. The best-known example:
- California requires daily overtime: time and a half after 8 hours in a workday and double time after 12. A long holiday call-out shift can trigger daily overtime even in a short week.
Other states have their own rules on things like reporting time pay, meal and rest breaks, and final paychecks. Check your state labor department before you set holiday policy. If you’re weighing where to base a business, see best states for a service business.
How this interacts with no tax on overtime
Under the 2025 “no tax on overtime” deduction, only the premium portion of overtime required by the FLSA, the half in time and a half for hours over 40, counts as qualified overtime. That means:
- Holiday premiums you pay voluntarily aren’t qualified overtime just because they’re premiums.
- State-only overtime, such as daily overtime that isn’t also over 40 hours a week, generally isn’t federal FLSA overtime.
- Accurate records matter, because the qualified amount has to be reported.
Full breakdown: no tax on overtime for trade technicians.
Building a fair holiday rotation
The law sets the floor. Fairness keeps your team. What works:
The techs who always say yes are the ones who quit first when it’s never their turn off. More on that in why your best technician is quitting.
Running after-hours dispatch
- Screen calls first. Not every holiday call is an emergency. A slow drain can be booked for Monday; no heat at 20 degrees can’t.
- On-call techs first, backups next. Make the order clear so nobody’s guessing at 11 p.m.
- Send the closest qualified tech. At night, drive time is most of the call.
- Log every call-out with times and photos, for payroll and for the customer.
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Holiday calls, handled
VortechPro offers after-hours jobs to the right techs first and keeps times and photos on every call-out. $99/mo for 5 techs, +$20 each. 30-day free trial, no contract.
