Federal labor laws, as codified in the Fair Labor Standards Act, do not attempt to define which days are holidays and which days are business days. Instead, the FLSA allows employers to decide on holidays, although employees or their organized labor union representatives might have some input into the decision. The federal government recognizes that forcing businesses to adhere to a strict holiday schedule could cause undue hardship, especially for small businesses with few employees. Under federal law, you are free to declare every day a standard business day and ignore holidays altogether if you so choose.
Christmas Eve itself is never recognized as a federal holiday. If Christmas day falls on a weekend, the Christmas holiday may be celebrated on a Friday or Monday. Should the day designated as the Christmas holiday happen to be Christmas Eve, it does not represent the recognition of Christmas Eve as a holiday, because the holiday being celebrated is actually Christmas day. If Christmas Eve falls on a weekday, it is business as usual for banks and federal agencies.
Federal law does not require you to provide your employees with time off for any holiday. You are not required to allow employees to take unpaid time off, and you are not required to pay them for a holiday if you choose to close the office for the holiday. If you require employees to work on a holiday, there is no federal statute requiring you to pay them any additional money for working on that day. Nor is there any federal law mandating compensatory time for exempt employees who work on a holiday.
Whatever you decide to do about holidays, you cannot take actions that are discriminatory in nature. For example, should you decide to allow all except a skeleton crew to take off on Christmas Eve, you could not base your decision on who must work on a discriminatory basis. Discrimination can be based on age, gender, race, religion, country of origin or disability. The laws regarding discrimination require you to make reasonable accommodations to your workers’ religious practices and beliefs if you can do so without incurring costs or difficulties. Thus, if a non-Christian worker volunteers to work an overnight shift so that his co-worker can attend a Christmas Eve midnight mass, you must allow the trade if the switch makes no difference to your costs and has no negative effect on your operations.
Should your workers be covered under a union contract that states that Christmas Eve is not a standard business day or should your state labor laws differ, you must follow the contract or law that is most beneficial to your workers. If you have a policy stating that Christmas Eve is a holiday, such as an employee handbook or employment agreement, you must comply with your policy. Your policy might state that employees receive paid time off or that they receive premium pay for working on the holiday, for example. You can amend your policy, but you have to do so in advance.