Federal holidays are eleven nationally recognized holidays in the United States when federal government employees receive paid time off. These holidays are established by federal law under Title 5 of the United States Code, Section 6103, and have been designated by Congress dating back to 1870.
When people refer to "federal holidays," they're talking about the specific days when federal government offices close and federal employees don't have to work but still receive their regular pay. This includes post offices, Social Security offices, federal courts, and other government agencies.
Here's what many business owners don't realize: federal holidays only directly apply to federal government employees. Private sector employers are not legally required to observe these holidays or provide paid time off to their employees when federal holidays occur. That said, many private businesses do choose to recognize some or all federal holidays as a standard employee benefit.
The 11 Federal Holidays
Congress has established eleven official federal holidays. Here they are in calendar order:
New Year's Day - January 1
Celebrates the start of the new calendar year. This was one of the four original federal holidays established in 1870.
Birthday of Martin Luther King, Jr. - Third Monday in January
Honors the civil rights leader who was instrumental in the American civil rights movement. This holiday was signed into law in 1983 and first observed in 1986, making it one of the newer federal holidays.
Washington's Birthday - Third Monday in February
Officially commemorates George Washington's birthday, though it's commonly known as Presidents' Day and often used to honor all U.S. presidents. This holiday dates back to 1879.
Memorial Day - Last Monday in May
Honors U.S. military personnel who died while serving in the Armed Forces. Originally known as Decoration Day, it became an official federal holiday in 1971.
Juneteenth National Independence Day - June 19
Commemorates the emancipation of enslaved African Americans and specifically marks June 19, 1865, when news of the Emancipation Proclamation reached Galveston, Texas. This is the newest federal holiday, signed into law by President Biden in 2021.
Independence Day - July 4
Celebrates the adoption of the Declaration of Independence in 1776. This was one of the four original federal holidays established in 1870.
Labor Day - First Monday in September
Recognizes the contributions of American workers and the labor movement. It became a federal holiday in 1894.
Columbus Day - Second Monday in October
Traditionally celebrates Christopher Columbus's arrival in the Americas. Many states and localities now observe this day as Indigenous Peoples' Day instead. The federal holiday was established in 1968.
Veterans Day - November 11
Honors all military veterans who have served in the United States Armed Forces. Originally called Armistice Day, commemorating the end of World War I, it was renamed Veterans Day in 1954.
Thanksgiving Day - Fourth Thursday in November
A day of thanks for the harvest and blessings of the past year. This was one of the four original federal holidays established in 1870.
Christmas Day - December 25
Celebrates the birth of Jesus Christ and is observed as both a religious and cultural holiday. This was one of the four original federal holidays established in 1870.
How Federal Holidays Are Observed
Federal holidays fall into two categories: fixed-date holidays and floating holidays.
Fixed-date holidays occur on the same calendar date every year:
- New Year's Day (January 1)
- Juneteenth (June 19)
- Independence Day (July 4)
- Veterans Day (November 11)
- Christmas Day (December 25)
Floating holidays always fall on a specific day of the week:
- Martin Luther King Jr. Day (Third Monday in January)
- Washington's Birthday (Third Monday in February)
- Memorial Day (Last Monday in May)
- Labor Day (First Monday in September)
- Columbus Day (Second Monday in October)
- Thanksgiving (Fourth Thursday in November)
When a fixed-date federal holiday falls on a Saturday, federal offices are typically closed the preceding Friday. When a fixed-date holiday falls on a Sunday, federal offices are closed the following Monday. This ensures federal employees still get a day off from work even when the actual holiday falls on a weekend.
For example, if Christmas falls on a Saturday, federal employees would have Friday, December 24th off. If New Year's Day falls on a Sunday, they would have Monday, January 2nd off as the observed holiday.
The Special Case of Inauguration Day
There's technically a twelfth federal holiday that only applies to certain federal employees: Inauguration Day. Every four years on January 20th (or January 21st if the 20th falls on a Sunday), when a new president is sworn into office, federal employees in the Washington, D.C. area receive the day as a paid holiday.
Inauguration Day only affects federal workers in the immediate D.C. area, not federal employees across the entire country. This is the only federal holiday that has geographic restrictions. In 2025, Inauguration Day fell on the same day as Martin Luther King Jr. Day, so it didn't create an additional day off for D.C. federal workers.
How Federal Holidays Impact Business Operations
Even though private businesses aren't required to observe federal holidays, these dates still impact operations in several ways:
Banking and Financial Services
Federal Reserve banks and most commercial banks close on federal holidays, which can affect payment processing, check clearing, and other financial transactions. If you rely on same-day banking services, plan ahead when federal holidays approach.
Postal Service
The U.S. Postal Service is part of the executive branch of the federal government and must observe all federal holidays. Post offices close and mail delivery stops on these days. If your business relies on mail delivery for time-sensitive materials, factor in federal holidays when planning shipments.
Government Offices
Any business that needs to interact with federal, state, or local government offices should expect closures on major federal holidays. This includes offices handling business licenses, permits, tax filings, and regulatory compliance matters.
Stock Market
The New York Stock Exchange and NASDAQ observe most federal holidays (with some exceptions like Veterans Day and Columbus Day). They also observe Good Friday even though it's not a federal holiday. The markets typically close early on the day after Thanksgiving as well.
Customer Expectations
Many customers expect businesses to close or have modified hours on major federal holidays, particularly New Year's Day, Independence Day, Thanksgiving, and Christmas. Even if you choose to stay open, you may see reduced foot traffic or sales on these days.
State-Specific Holiday Variations
While federal holidays apply nationwide for government employees, individual states often designate additional state holidays or modify how federal holidays are observed.
Some states recognize holidays not on the federal list, such as Confederate Memorial Day in some Southern states, Patriots' Day in Massachusetts and Maine, or César Chávez Day in California. State government offices and courts close on these state-specific holidays, even though they're not federal holidays.
A few states have also changed how certain federal holidays are observed. For example, some states officially call Columbus Day "Indigenous Peoples' Day" or observe it under both names.
If your business operates in multiple states, be aware that state government offices, courts, and some services may be closed on days that aren't federal holidays. This is particularly relevant if you work with state agencies or need state-level approvals for business operations.
Creating Your Holiday Policy
If you're a private employer deciding which holidays to offer your team, federal holidays provide a useful starting point but shouldn't be treated as mandatory.
Consider these factors when choosing which holidays to observe:
Industry Standards
Look at what competitors and similar businesses in your industry typically offer. If most restaurants in your area close on Thanksgiving, doing the same helps you stay competitive for talent.
Business Needs
Some businesses must operate every day of the year. Hospitals, emergency services, hotels, and restaurants often can't close for holidays. In these cases, consider offering premium pay or alternative days off instead of closing entirely.
Employee Demographics
If your workforce is diverse, consider whether the federal holiday list adequately reflects holidays that matter to your team. You might add floating holidays that employees can use for religious or cultural observances not covered by federal holidays.
Cost Considerations
Every paid holiday represents labor cost for hours you're paying employees not to work. Balance the employee benefit against your business's financial reality. Newer or smaller businesses often start with fewer paid holidays and add more as they grow.
Most small to mid-sized private businesses offer six to eight paid holidays per year, typically the "big six" core holidays (New Year's, Memorial Day, July 4th, Labor Day, Thanksgiving, Christmas) plus one or two additional days like the day after Thanksgiving or Christmas Eve.
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