Does Costco Pay Time and a Half? Holiday Pay & OT

Overtime: yes, by law. Costco’s hourly employees are non-exempt, so hours over 40 in a workweek are paid at 1.5 times the regular rate. Holidays: yes, and more than most retailers. The one Costco pay contract that is public, the 2025–2028 national agreement with the Teamsters, pays time and a half for hours worked on a holiday on top of the regular holiday pay.

That contract covers Teamsters-represented warehouses. Most Costco employees work under the Costco Employee Agreement instead, which isn’t published, so treat the details below as the union terms and check your own agreement for anything that differs.

Costco holidays and holiday pay

The Teamsters agreement (Article IX) names six contract holidays:

• New Year’s Day, Memorial Day, the Fourth of July
• Labor Day, Thanksgiving Day, Christmas Day

For those days it sets out:

• Not working the holiday: a full-time employee gets 8 hours of holiday pay. Eligible part-time employees get a prorated amount based on their recent weekly hours.
• Working the holiday: hours worked are paid at time and a half in addition to the holiday pay allowance. Instead, an employee can choose to work at time and a half and take an extra day off within the next two weeks.
• New and seasonal staff: probationary and seasonal employees don’t get the holiday pay allowance, but they are paid the time-and-a-half premium for hours worked on the holiday.
• To qualify, you generally have to be available for your scheduled shifts the workday before and after the holiday.

Costco warehouses close on several of these days, so for many employees the benefit is the paid day off rather than premium pay for working it.

Holiday weeks: overtime after 32 hours

Here the contract goes well beyond the law. In a holiday week, a full-time employee’s regular week is the holiday plus four 8-hour days, and time worked on the non-holiday days beyond 32 hours is paid at time and a half. The agreement also counts an unworked contract holiday as time worked when computing overtime. Federal law does neither: under the FLSA a paid holiday you don’t work never counts toward 40.

Worked example

A full-time employee earning $25 an hour works 8 hours on Labor Day under the union terms:

If the same employee also works 36 hours on the other four days, the 4 hours past 32 are paid at $37.50 as well.

Is Sunday time and a half at Costco?

Not under the Teamsters agreement. It pays 1.5× for all hours on a contract holiday that falls on a Sunday, and it gives full-time employees an accelerated accrual for hours worked on Sundays, but it sets no general Sunday pay premium. Posts saying every Costco Sunday pays time and a half may describe an older or non-union arrangement; if Sunday pay matters to you, check your own agreement or pay stub. Federal law doesn’t require Sunday premium pay.

Checking your Costco paycheck

1. Count hours worked per workweek. Over 40 is federal overtime; in a holiday week under the union contract, check the 32-hour rule too.
2. For a holiday you worked, look for both the holiday allowance and the 1.5× hours.
3. If something is missing, raise it with your warehouse’s administration or your union steward first, then with your state labor office or the Department of Labor.

The holiday pay calculator handles a holiday week, and the time and a half calculator covers a normal overtime week.

Sources

• Costco–Teamsters national agreement, February 2025 through January 2028, International Brotherhood of Teamsters (Article IX, Holidays)
• Fact Sheet #23: Overtime Pay Requirements of the FLSA, U.S. Department of Labor