I would pay for the hours worked on the holiday and for the holiday as well. If working on the holiday throws an ee into OT for that week, then some or all of the hours actually worked on the holiday would be at time and a half. Added to that would be 8 hours of holiday pay at the regular rate of pay.
If you don't pay for the actual hours worked and for the holiday, you very well may have a messy employee relations problem. For example, if you don't pay what amounts to double time, then the ee's who don't work on the holiday get full time pay for that day, but the ee's who do work on the holiday only get half time for the holiday. It would create an inequity.
I hope this helps.