Floating Closer to Wages? “Floating” Holidays Under the Massachusetts Wage Act

By Andrea M. Sullivan

In an effort to provide employees with more flexible benefits, employers often offer “floating” holidays. Depending on the employer’s policy, these floating holidays fall into two categories: those that can be used any day of the year and those that can only be exercised on certain days specified by the employer. Floating holidays are often offered in addition to set holidays, such as Christmas Day or New Year’s Day, but do not have to be.

While these benefits may be attractive to employers and employees alike, the present ambiguity concerning whether they are considered wages under the Massachusetts Wage Act (the “Wage Act”), G.L. c. 149, § 148 should give employers pause.

In Massachusetts, pursuant to G.L. c. 149 § 148, when an employee is terminated or fired, the employee must be paid all earned wages in full on their last day of work. If the employee resigns or voluntarily leaves, the employee must be paid all earned wages on the next regular pay day. Under either scenario, the employer must determine what earned wages are due and owing to the employee. While the Wage Act does not expressly define “wages,” Massachusetts courts have concluded that, to qualify as “wages,” the amounts in question must be “earned,” meaning that they must be “acquire[d] by labor, service or performance.” Birnbach v. Antenna Software, Inc., Civil No. 14-11651, 2014 WL 2945869, at *2 (D. Mass. June 26, 2014) (quoting Massachusetts. State Police Commissioned Officers Ass’n. v. Commonwealth, 462 Mass. 219, 226 (2012)). The Wage Act gives some guidance, specifying that “‘wages’ shall include any holiday or vacation payments due an employee under an oral or written agreement.” G.L. c. 149, § 148. Further, a Massachusetts Attorney General advisory clarifies that “[e]mployers who choose to provide paid vacation to their employees must treat those payments like any other wages.” Andrea Campbell, Advisory 99/1, Fair Labor Division of the Commonwealth’s Attorney General’s Office, 1999. Whether floating holidays are considered wages under the Wage Act is not addressed in the Wage Act and has not been squarely resolved by any Massachusetts court or the Massachusetts Attorney General.

Whether floating holidays are considered wages under the Wage Act will likely depend on the employer’s policy that provides for such floating holidays. If the employer treats floating holidays like vacation—i.e., time off that is granted and can be used whenever the employee chooses—those floating holidays will likely be considered wages that must be paid out at separation. For example, if an employer provides its employees with three floating holidays that can be used any day of the year, unused days will likely have to be paid out upon separation. However, if the employer only allows the floating holidays to be used on certain dates, those floating holidays would be more akin to regular holidays, and an argument could be made that they are not wages that need to be paid out at separation. For example, the employer offers employees one floating holiday that can be used on Veteran’s Day or the day after Thanksgiving.

At this point, in the absence of any direct guidance from the Massachusetts courts, the legislature through amendment to the Wage Act, or an advisory from the Attorney General, and in light of the severe penalties facing employers that fail to pay wages, the safest and most risk-averse approach is to treat floating holidays as wages that must be paid out at separation.

To understand how the U.S. District Court for the District of Massachusetts may be leaning on the issue, Massachusetts employers and employees should pay close attention to a recent case filed in Middlesex Superior Court and later removed to the United States District Court of Massachusetts at the end of 2025: Anna Weick v. President and Fellows of Harvard College., No. 1:25-cv-13123 (D. Mass. filed Oct. 24, 2025). In that putative class action, the plaintiffs claim that, following their separation from the defendant employer, their unused “personal” time was not paid out. The amended complaint, referring to Harvard’s “policy and practice,” defines personal time as time that “may be used for any purpose and [that is not] connected to any specific contingencies, such as sickness, bereavement, jury duty or similar issues.” As such, the plaintiffs claim that their unused personal time should be considered wages under the Wage Act and should have been paid out at separation. Amended Complaint at 14, Weick, No. 1:25-cv-13123 (D. Mass. filed Oct. 30, 2025).

The defendant moved to dismiss the case on three grounds, arguing: (1) the case is preempted by federal labor law because the plaintiffs are parties to a collective bargaining agreement providing that “[e]mployees leaving the University will not be paid for their unused personal days;” (2) the plaintiffs have failed to exhaust administrative remedies as required by the collective bargaining agreement; and (3) personal time is not a wage under the Wage Act. Memorandum of Law in Support of Defendant President and Fellows of Harvard College’s Motion to Dismiss Plaintiff’s Complaint, Weick, No. 1:25-cv-13123 (D. Mass. filed November 13, 2025). Assuming the federal court reaches the issue of whether the paid personal time in this case is considered wages under the Wage Act, the ruling could be highly persuasive authority on the larger issue of whether floating holidays are also considered wages.

While employers and employees wait for guidance on this issue from the courts or the Attorney General’s Office, below are some practice considerations and implications for employers and employees alike:

• For employers:
  • Be explicit: clearly state in written policies whether floating holidays accrue, whether unused days are paid out at termination, any caps or forfeiture rules, and procedures for scheduling.
  • Consistency matters: inconsistent practice can undermine a policy that denies payout.
  • Consider legal review: ensure handbook language complies with state rules and minimizes the risk of floating holidays being treated as wages.
• For employees:
  • Review employer policies, offer letters, and union contracts for language on accrual and payout.
  • If an employer promised payout or a policy indicates accrued days are earned, you may have a claim for unpaid wages if not paid at separation.

Andrea MacIver Sullivan is a Shareholder in Ogletree Deakins’ Boston office. She represents employers in employment litigation matters, including Wage Act litigation.