Finally, according to the FLSA, private employers must pay nonexempt employees time and a half for any hours worked on a federal holiday. Workers on long-term sick leave continue to accrue holiday while they are off work.It is unlawful to include an amount for holiday pay in a PA's hourly rate. Pennsylvania law does not require employers to provide paid holiday leave. In Pennsylvania, an employer must pay an employee for accrued vacation upon separation from employment if its policy or contract provides for such payment. dli. Who's eligible for paid holidays? When it comes to employee leave laws in Pennsylvania, it's important to understand the state's regulations regarding vacation and holiday pay. Often, when state employees are required to work on Memorial Day they will be paid holiday pay such as one and one half their regular rate of pay. Employers are not required to give employees paid holidays off or additional pay for working on holidays. Overtime wages must be included in the paycheck that follows the overtime work period.