Paid Holidays in Illinois: Employer Rules, Pay, and Claims

Paid holidays in Illinois are not required by state law. Private employers do not have to close on any holiday, pay you extra for working one, or give you the day off with pay. Once an employer promises holiday pay in a handbook, contract, or collective bargaining agreement, that promise becomes enforceable as wages. And a separate 2024 law now gives most Illinois workers 40 hours of paid leave per year that can be used for any reason, holidays included.

No State or Federal Mandate

The Illinois Department of Labor states directly that employees are not entitled to holiday pay by law. No statute requires a private employer to close on any holiday or to pay extra for holiday shifts.¹ Federal law is the same on this point: the Fair Labor Standards Act governs wages and overtime but does not require pay for time not worked, including holidays.²

Illinois also does not require premium pay for hours worked on a holiday. If you work Christmas Day or the Fourth of July, your employer can pay your regular hourly rate unless a policy, contract, or union agreement says otherwise. Many employers pay time-and-a-half or double time for holiday shifts, but that is a business decision, not a legal one.

The Paid Leave for All Workers Act

Illinois has no holiday-pay mandate, but it does have a paid-leave law that can be used for holidays. The Paid Leave for All Workers Act took effect January 1, 2024, and requires employers to provide paid leave that employees may use for any reason, including religious observances, cultural holidays, or taking a federal holiday their employer doesn’t recognize.³

The core rules:

You accrue one hour of paid leave for every 40 hours worked, up to at least 40 hours in a 12-month period.
Accrual begins on your first day of work or the law’s effective date, whichever is later.
Salaried employees exempt from FLSA overtime are treated as working 40 hours per week for accrual.
Unused leave carries over year to year, though an employer isn’t required to let you use more than 40 hours in a single 12-month period.

The Act covers most employees in Illinois, including domestic workers, but excludes certain groups such as federal and railroad employees, some short-term workers, and students employed part-time by their college or university.³ Employers that already offer at least 40 hours of unrestricted paid time off each year satisfy the law. Employers whose PTO is limited to specific categories, such as sick leave only, may need to adjust.

When a Handbook or Contract Creates an Enforceable Right

The absence of a mandate does not let an employer walk away from its own promises. Once holiday pay is set out in an employee handbook, employment contract, or collective bargaining agreement, it becomes enforceable under the Illinois Wage Payment and Collection Act. The Act defines “wages” broadly as compensation owed under an employment contract or agreement, and it specifically includes the monetary equivalent of earned holidays in the definition of “final compensation.”⁴

If your employer promises eight paid holidays per year, or time-and-a-half for holiday shifts, it has to deliver. Failing to pay what the policy promises is treated the same as failing to pay regular wages. That is why the exact language of the handbook matters: which holidays are recognized, who qualifies, and any conditions attached to premium pay.

Holiday Pay When You Leave a Job

When you leave, whether you resign or are terminated, any earned holiday pay that hasn’t been paid out becomes part of your final compensation. The Wage Payment and Collection Act lists “earned holidays” alongside earned vacation, commissions, and bonuses as items the employer must pay.⁵ If you worked a company holiday and were promised premium pay for that shift, resignation or termination doesn’t cancel the obligation.

The operative word is “earned.” If the holiday hasn’t happened yet, or the policy requires you to work the day before and after to qualify, those conditions can limit what counts as earned. Read the handbook carefully, because whatever it says, the employer is bound by it.

Holiday Pay and Overtime

Paid holiday time off does not automatically count toward the 40-hour weekly threshold for federal overtime. The FLSA requires overtime only for hours actually worked past 40 in a workweek.⁶ If you receive eight hours of holiday pay on Monday without working, then work 36 hours the rest of the week, you have not hit 40 hours worked, even though your paycheck reflects 44 hours of pay.

Some employers do count holiday hours toward the overtime threshold, but that’s voluntary. If the handbook says holiday hours count, that promise is enforceable under the Wage Payment and Collection Act.

There is one wrinkle on premium pay. When an employer pays a premium rate for hours actually worked on a holiday, the premium portion can sometimes be credited toward overtime under FLSA Section 7(e)(6). If your regular rate is $15 and you receive $22.50 for working Thanksgiving, the extra $7.50 per hour can count toward overtime owed that week. Idle holiday pay, meaning pay for a holiday you did not work, cannot be credited toward overtime.²

Religious Holidays and Discrimination

Even though the holiday schedule itself is up to the employer, how the schedule is applied can create legal exposure. The Illinois Human Rights Act prohibits employment discrimination on the basis of religion, among many other protected characteristics.⁷ A calendar that recognizes only Christian holidays is not unlawful on its own, but applying it in a way that penalizes workers of other faiths can be.

The Act requires employers to reasonably accommodate sincerely held religious practices unless doing so causes undue hardship. That can mean allowing shift swaps, use of paid leave, or unpaid time off for a religious holiday not on the company calendar.⁷

The undue-hardship standard was tightened in 2023 by the U.S. Supreme Court’s decision in Groff v. DeJoy. The prior threshold of “more than a minimal cost” was replaced with a burden that is “substantial in the overall context of an employer’s business,” considering the employer’s size, nature, and operating cost.⁸ Under that standard, a simple shift swap or letting an employee use accrued leave for a religious holiday will rarely qualify as undue hardship.

Consistency also matters. If two employees request time off for different religious observances and one is granted while the other is denied without a legitimate operational reason, that difference can support a discrimination claim.

Federal Service Contractors

If your employer works under a federal service contract, stricter rules apply. The Service Contract Act requires contractors to provide fringe benefits, including holiday pay, as specified in the wage determination attached to the contract. That determination typically lists named holidays and requires payment for each.⁹

An employee who performs any work during the week containing a named holiday is entitled to the holiday benefit, even if the holiday falls on their regular day off. Contractors also cannot deny holiday pay for short tenure or for failing to work the day before or after, unless the wage determination says so. A full-time worker who works on the holiday itself must receive the regular day’s pay plus either additional pay equal to a full day (up to eight hours) or a substitute paid day off.⁹

Filing a Claim for Unpaid Holiday Pay

If your employer promised holiday pay and didn’t deliver, you can file a wage claim with the Illinois Department of Labor. The Department reviews the claim for completeness and jurisdiction, notifies the employer, and gives the employer a chance to pay or dispute. If disputed, the Department investigates and decides whether a hearing is warranted.¹⁰ The Department can also act on behalf of a class of employees when the same policy affects a group of workers.⁴ If the problem is discriminatory application of a holiday policy rather than unpaid wages, a charge with the Illinois Department of Human Rights must be filed within two years of the alleged discriminatory act.¹¹

1
Illinois Department of Labor. Holiday FAQ
2
eCFR. 29 CFR 778.219 – Pay for Forgoing Holidays and Unused Leave
3
Illinois General Assembly. 820 ILCS 192 – Paid Leave for All Workers Act
4
Justia Law. Illinois Code 820 ILCS 115 – Illinois Wage Payment and Collection Act
5
Illinois General Assembly. 820 ILCS 115 – Illinois Wage Payment and Collection Act
6
U.S. Department of Labor. Overtime Pay
7
Illinois General Assembly. Illinois Human Rights Act – FullText
8
U.S. Equal Employment Opportunity Commission. Religious Discrimination
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U.S. Department of Labor. Fact Sheet 67B – Meeting Requirements for Service Contract Act (SCA) Fringe Benefits
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Illinois Department of Labor. Filing A Claim – FAQs
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Illinois Department of Human Rights. Filing a Charge