The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. These benefits are matters of agreement between an employer and an employee (or the employee's representative).
On a government contract to which the labor standards of the McNamara-O'Hara Service Contract Act apply, holiday and/or vacation fringe benefit requirements are stated in the SCA wage determinations in contracts that exceed $2,500.
On a government contract to which the labor standards of the Davis-Bacon and Related Acts (DBRA) apply, holiday pay and/or vacation pay is required for specific classifications of workers only if the Davis-Bacon wage determination in the covered contract specifies such requirements for workers employed in those classifications.
Regulations on this Topic
29 CFR Part 4.173 – Regulations on Meeting Requirements for Vacation Fringe Benefits for Federal Contracts.