Question: Do we need to pay an employee who was scheduled to work on a holiday but called in sick and did not work?
Answer: Wage and hour laws generally do not require employers to pay holiday pay (check state and local laws for your locality).
As to nonexempt employees, an employer’s established policy and past practice solely govern the payment of holiday pay. If the employee does not work a scheduled day, he or she is not required to be paid for time not worked, unless the employer’s policy or past practice dictates otherwise.
For exempt employees, employers need to consider the salary basis issue for the exemption that requires that exempt employees are paid full salary for the week in which they work. In the case of exempt employees, federal law requires that the employee be paid his or her regular salary without interruption. The employee may be required to utilize any accrued vacation time or personal time off applicable to their absence; if there is not sufficient accrued time, the employee must receive his or her full pay.