Home Care Holiday Pay vs. the Holiday Bill Rate: Paid by One Rule, Billed by Another

What federal law says about holiday pay, as of October 17, 2026

The Department of Labor states the starting point in one line: the Fair Labor Standards Act “does not require payment for time not worked, such as vacations or holidays (federal or otherwise).” The same page says these benefits are generally a matter of agreement between an employer and an employee or the employee’s representative. The FLSA has no rule that work on a holiday must be paid at a premium. A holiday premium in a home care agency is the agency’s policy, and a state or local law can add its own requirements, which the agency’s counsel checks for each state it operates in.

The federal text matters most where a holiday premium meets overtime. Under 29 CFR 778.203, extra pay at a premium rate of at least time and one-half for work on Saturdays, Sundays, holidays or regular days of rest may be treated as an overtime premium. It need not be included in the employee’s regular rate and may be credited toward overtime owed under the Act — provided it is based on a rate established in good faith for like work on other days. If the premium is less than time and one-half, the rule says the extra pay “must be included in determining the employee’s regular rate of pay and cannot be credited toward statutory overtime due.” A flat holiday differential of a dollar or two an hour sits in that second group.

Pay for a holiday not worked is a separate case. Under 29 CFR 778.219, certain payments for periods when no work is performed because of a holiday are not regarded as compensation for working, are not required to be included in the regular rate, and may not be credited toward overtime.

Whether the agency owes federal overtime to its caregivers at all is a question in motion, and this page does not answer it. As of October 17, 2026, 29 CFR 552.109(a) still says third-party employers of employees providing companionship services may not use the minimum wage and overtime exemption in section 13(a)(15) of the FLSA, and 552.109(c) says the same for the live-in overtime exemption. Field Assistance Bulletin 2025-4, issued July 25, 2025, told the Wage and Hour Division to suspend enforcement of the provisions introduced in the 2013 rule until the effective date of any final rule. The Department’s proposal to return to the 1975 regulations was published on July 2, 2025, and no final rule had been published as of the date above. The bulletin is internal enforcement guidance and says it does not alter any statutory or regulatory requirements. State overtime laws are separate again. The agency’s counsel decides how all of this applies; the rest of this guide is about the bill.

How a holiday gets paid at the holiday rate and billed at the standard one

None of the mechanisms below needs a mistake by any one person. Each is a gap between two rules, two calendars or two documents.

• A pay rule with no bill rule. The holiday premium is set up in payroll and applies to every visit on the date. No holiday rate is set on the client’s billing profile, so the invoice prices the same hours at the standard rate.
• Two holiday calendars. Caregivers are promised a premium on Christmas Eve and New Year’s Eve; the service agreement names only federal holidays, or names none. Either way the paid list and the billed list differ by a day or two.
• Shifts that cross midnight. An overnight from 11 p.m. Wednesday to 7 a.m. Thursday has seven holiday hours if the pay rule counts hours by clock time, and none if the billing rule counts the whole shift by its start date.
• Live-in and 24-hour cases. A daily or per-shift rate has no hourly field for a differential to attach to, so a holiday premium on the pay side has nothing to land on unless a separate holiday day rate exists.
• A service agreement that is silent. Even where the platform could bill a holiday rate, the agency may have no signed basis to charge it, and a family that sees a higher holiday invoice for the first time in December has a fair question.
• Coverage changes on the day. A caregiver calls off on Thanksgiving morning and the shift is covered by someone else, sometimes under a manually edited visit. The pay rule follows the new visit; a bill rate set on the original visit may not.
• A payer with a cap. Where a long-term care insurance policy reimburses up to a set daily amount, a holiday differential can exceed it. If no payer of record is named for the difference, it may never be billed to anyone.

The 2026 holiday dates to set before Thanksgiving

The dates below are the ones the remaining weeks of 2026 bring. The federal holidays are taken from the Office of Personnel Management’s list; Christmas Eve and New Year’s Eve are not federal holidays and appear because agencies may choose to pay a premium on them. Which days the agency pays and bills as holidays is its own choice. The point is that both rules carry the same list.

• Thanksgiving Day: Thursday, November 26, 2026.
• Christmas Eve: Thursday, December 24, 2026 (not a federal holiday).
• Christmas Day: Friday, December 25, 2026.
• New Year’s Eve: Thursday, December 31, 2026 (not a federal holiday).
• New Year’s Day: Friday, January 1, 2027.

For each date, three questions are worth an answer in writing before the week of November 23: Is the date on the payroll holiday calendar? Is it on the billing holiday calendar, and on the rate sheet families signed? And for overnight, live-in and 24-hour clients, which hours count as the holiday on each side?

Count last year’s holiday gap from the agency’s own reports

The check takes an hour or two from two reports the agency already runs: payroll hours by pay code, and invoiced hours by client and service date. It uses no client health information; hours, dates, rates and client IDs are enough.

• Pick last year’s holiday dates, the same list as above.
• From payroll, pull every hour paid at a holiday pay code on those dates, by client.
• From billing, pull every hour invoiced on the same dates, by client, with the rate it was billed at.
• Match them client by client. Sort into three groups: billed at a holiday rate, billed at the standard rate, and not billed at all.
• For the second group, check whether the client’s service agreement or rate sheet has a holiday clause. Where it does, the gap was billable. Where it does not, it is a policy decision the agency has not yet made.
• Multiply the billable gap by the difference between the holiday bill rate and the standard rate, and total it by holiday and by client.

Illustrative example: an agency pays caregivers time and a half on Thanksgiving and Christmas, $18 an hour standard and $27 on the holiday, and bills $36 an hour standard with a holiday rate of $54 written into its rate sheet. Across the two days, 300 hours are paid at the holiday code. If 200 of them are billed at $54 and 100 at $36 because those clients’ billing profiles never had the holiday rate added, the margin on those 100 hours falls from $27 an hour to $9, a $1,800 gap nobody chose. The numbers are round and hypothetical; the agency’s own reports give the real ones.

What the service agreement and the families should hear before the holiday

The bill side is only as strong as the agreement behind it. A holiday clause that does its job is short and specific, and the agency’s counsel reviews the wording, because some state licensing rules set required contents for home care client agreements.

• The list of holidays by name, matching the payroll holiday calendar.
• The holiday rate, or the multiplier on the standard rate, for hourly, live-in and 24-hour service.
• How hours are counted on a holiday, including shifts that cross midnight.
• Who pays any part a long-term care policy or other payer does not cover: the payer of record for the difference.
• The notice the agency gives before a holiday rate applies, and where the current rate sheet lives.

A short note to each family three or four weeks before Thanksgiving, with the dates and the rate, turns a December invoice question into a November confirmation. It also gives the office a natural point to confirm holiday schedules early, when coverage is still easy to arrange.

When not to bill a holiday rate, and where the Review fits

Billing a holiday premium is a choice, not an obligation. An agency may decide to absorb it for long-standing clients, for clients on a tight fixed budget, or because a competitor down the road does not charge one. That is a reasonable decision when it is a decision. The gap this guide is about is the one nobody chose: a premium the agency believes it bills and does not, or one it pays on days its agreements never mention. If last year’s count shows every holiday hour billed as intended, there is nothing to fix.

The count above is free and takes an afternoon. If the gap turns out to be one piece of a wider pattern — hours paid and never invoiced, mileage reimbursed and never billed, family invoices paid weeks after payroll — the Revenue Review is a read-only engagement of two weeks that sets payroll hours against billed hours by client from the agency’s own reports, with a monthly dollar figure wherever the records support one, and ends in a written report the agency keeps. It gives no wage-and-hour or legal advice. It is not worth buying when the reports already match. A free 20-minute call is enough to tell which case applies.