Generally speaking, I think companies are afforded a lot of latitude with respect to how they set up (or not) and administer their holiday programs.  Follow this link to the U.S. Department of Labor http://www.dol.gov/dol/topic/wages/holiday.htm and read what they say about holiday pay.  The first thing that I would do is look into what the company's policies and procedures and/or employee handbook say on the matter to determine if there is an inconsistency.  Additionally, companies that perform under federal government contracts--especially under Service Contract Act (SCA) covered contracts--need to be careful to ensure that they comply with the contract requirements.   It is difficult to definitively answer the question without knowing all of the specifics and circumstances (what the company policy says, what industry the company is in, what State you might be in, etc.), but I could definitely see circumstances where a company could legitimately do what you are describing.  It may not be super employee-friendly, but it may be permissable.   Wayne Hinton FedBizAdvice, LLC