Last updated: October 27, 2026
By Tom Kenaley, Senior Partner and President, KORE1
Agency contractors are typically paid for hours worked, so an unworked holiday usually isn’t billed unless your agreement says otherwise. Required paid sick leave works differently. The staffing firm owes it as the employer of record, and in most of our contracts it’s already built into the rate.
That second part surprises more hiring managers than the first. Holidays are intuitive once you think about it for a second. Sick leave is a legal obligation dressed up as a line item nobody explains, and December is exactly when both questions show up at once.
Do agency contractors get paid for holidays?
A contract employee’s pay for a holiday depends on whether they actually worked it. Most contract staffing arrangements bill on hours worked, period, so Thanksgiving, the day after, and the week between Christmas and New Year’s are unbilled unless the contractor is at the client site doing the job. Federal law doesn’t require holiday pay for anyone, contractor or full-time, and most staffing agreements simply follow the hours.
Not always, though. Some clients negotiate a floating holiday into the statement of work, especially for long-running engagements where the contractor is effectively part of the team. If that’s in your contract, say so in writing, because otherwise the default assumption on both sides is hours worked, hours billed.
A five-day holiday week with one day actually staffed reads exactly how you’d expect on the invoice: one day’s hours, nothing more. The gap in expectations isn’t about the money. It’s that nobody told the hiring manager ahead of time, so the invoice looks “short” and somebody calls to ask why.
Who actually pays required sick leave on a contractor?
The W2 employer of record pays it, and for a contractor on assignment through KORE1, that’s us, not your company. California requires it under a 2023 expansion of the Healthy Workplaces, Healthy Families Act (Senate Bill 616) that raised the statewide minimum from three days to five. A contractor working in California accrues at least one hour of paid sick leave for every 30 hours worked, is entitled to use at least 40 hours or five days a year, and an employer can cap total accrual at 80 hours, according to the California Labor Commissioner’s Office.
Devin Hornick, a partner at KORE1, put it plainly on a call about how this gets explained to clients. “The absolute myriad of insurance coverages that we carry, the five days of sick pay,” he said, “because it’s a California law.” The point he’s making isn’t a sales pitch. It’s that the obligation exists whether anyone bills for it separately or not, and somebody has to be the employer who’s on the hook if it’s skipped.
Outside California, the rules vary by state and sometimes by city, and a handful of states have no statutory sick leave requirement at all. The employer-of-record answer stays the same everywhere it applies. Ask who issues the W2. That’s who owes the sick time, and if you’re still sorting out what W2 status even means next to C2C and 1099 arrangements, we’ve laid out the differences in W2 vs. C2C vs. 1099.
Is sick pay inside the bill rate, or is it billed separately?
Ask. Agencies handle this differently, and a quote that looks cheaper on the surface sometimes just moved required costs off the page instead of out of existence. At KORE1, sick leave is built into the rate you’re quoted. There’s no separate line item for it, and no surprise add-on when a contractor actually uses the time.
“We’re taking really good care of the people that are working for you,” Hornick said on the same call, talking about why the coverage is structured that way rather than stripped out to shave a dollar an hour off the quote. It’s a self-interested thing to say, coming from the person who bills you. I’d still rather you know the bias going in than find it out from a contractor who got sick and didn’t get paid.
What’s actually inside a contract bill rate?
Pay, plus a 24% employer burden, plus a margin. Run the arithmetic on $100 an hour in pay: add 24% burden and the loaded cost is $124, and the bill rate on top of that typically lands around $150 to $160 depending on role and market. Sick leave sits inside that 24%, alongside payroll taxes, workers’ comp, and the insurance coverages Hornick mentioned above.
Here’s where most comparison shopping goes wrong. A quoted markup percentage only means something once you know what it’s being applied to. Ask whether the number sits on top of pay, or on top of the loaded cost that already includes burden. The same percentage produces two very different bill rates depending on the answer, and we’ve written a full breakdown of the 24% figure, with the worked example end to end, on our contractor burden rate page if you want the long version.
What else does that bill rate cover?
Employer-side payroll taxes are not optional and they’re not small. Social Security costs the employer 6.2% on wages up to $184,500 in 2026, and Medicare adds another 1.45% with no cap at all, per IRS Publication 15. Add workers’ compensation insurance, general liability coverage, unemployment insurance, and the required sick leave above, and the 24% stops looking abstract.
None of that is KORE1-specific. Every staffing firm that properly classifies its contractors as W2 employees carries some version of this cost structure. What differs firm to firm is whether it’s disclosed clearly or buried in a markup percentage that leaves you guessing.
What happens to the invoice between Thanksgiving and New Year?
It gets shorter, and that’s normal. A client office that closes the Wednesday before Thanksgiving through the following Monday, then shuts down again for a stretch around Christmas and New Year’s, isn’t billing those unworked days on either end. Picture a help desk L2 contractor in Los Angeles, billing in the $53 to $66 range with a $58 median under our Q4 index. A four-day client shutdown the week of Christmas means roughly one day of hours that week instead of five, and the invoice reflects exactly that.
Across our own Southern California placements, help desk roles at all levels billed $41 to $55 an hour with a $49 median, n=39, under the same index. Plan your December budget off the hours you’ll actually need staffed, not a flat weekly number, because the weeks around the holidays are the two times a year that number is reliably wrong.
Tell your agency the holiday weeks you expect in advance. We can plan contractor coverage, backfill, or just a lighter invoice around it instead of someone discovering a surprise at month end.
Does a long-running assignment change any of this?
Not the holiday and sick pay mechanics, no. What changes is how often the question comes up. The median KORE1 contract assignment runs 116 days, n=1,887 across 2019 to 2026, which means most engagements touch at least one major holiday stretch somewhere in the middle. Longer assignments also convert to direct hire more often. Our contract-to-hire rate sits at 37.5%, n=552, and a contractor who’s already cleared 1,040 billed hours converts with no placement fee.
That conversion detail matters here because none of the holiday or sick leave rules above reset when a contract rolls into year two or converts to a permanent hire. It just becomes an HR question instead of a staffing-invoice question, which is honestly the easier version of the same conversation. Most hiring managers also want to know who explains sick leave and holiday policy to the contractor directly, and that’s a day-one topic we cover in the contractor onboarding checklist.
| Line Item | Included in the Bill Rate | Negotiable | Not Applicable |
|---|---|---|---|
| Hours actually worked | Yes, always | ||
| Unworked holiday hours | Sometimes, if written into the SOW | ||
| Required sick leave (CA: 40 hrs/5 days min.) | Yes, at KORE1 | Varies by agency | |
| Employer payroll taxes (Social Security, Medicare) | Yes, always | ||
| Workers’ comp and liability insurance | Yes, always | ||
| Vacation/PTO beyond statutory sick leave | Sometimes, long assignments only | ||
| Placement fee on contract-to-hire after 1,040 hours | Waived at KORE1 past that threshold |
Planning December coverage? Get a bill rate quote for your role, level, and metro, tell us the start date, length, and which holiday weeks you need covered, and we’ll give you a number that already accounts for all of it. Want the full 2026 numbers first? The 2026 Contract Rate Card and the contract staffing cost calculator both run off the same index cited in this post.
Before You Call Us
Are agency contractors paid for Thanksgiving and Christmas?
Usually not. Most client sites are closed anyway, so there’s no shift to bill. The exception is a contract that specifically negotiates a floating holiday, which happens more on long engagements than short ones, and even then it’s written into the SOW rather than assumed.
Who pays sick leave for a temp worker in California?
Whoever issues the W2. For most contractors on assignment through KORE1, that’s KORE1, not the client company. The state doesn’t care whose desk the contractor sits at. It cares who runs payroll, and that’s the employer of record on the hook for the five days.
Is sick pay included in a contractor bill rate, or does it show up separately?
Depends which agency you ask. At KORE1, included, no separate line. I can’t speak for how every competitor structures theirs, so this is one of maybe three questions worth asking any agency before you sign, not just us.
What shows up on my staffing invoice in December when contractors take holidays?
Fewer hours. That’s really the whole answer. The rate per hour doesn’t move, the insurance and tax coverage inside it doesn’t move, and the total line just follows whatever hours got worked that week instead of a flat 40.
Does a contractor earn more sick time the longer they’re on assignment?
Up to a point, yes. One hour accrues for every 30 worked, so a six-month assignment banks more than a six-week one. California caps the total at 80 hours, and once a contractor hits that ceiling, the clock just pauses until they use some of it down.
Questions specific to your role, metro, or holiday calendar? Reach out to our team and we’ll walk through the actual numbers for your req, not the generic version.
