Federal holidays in the United States are 11 days each year when federal government offices close and federal employees receive paid time off. However, there is no federal law requiring private-sector employers to give employees time off on federal holidays — it’s entirely at the employer’s discretion, unless state law or an employment contract says otherwise.
This distinction catches many employers off guard. While most private companies observe at least some federal holidays, your legal obligations depend on your state, your industry, and your employment agreements. This guide covers every federal holiday for 2026, what they mean for private employers, and how to handle pay when holidays fall on weekends.
This article is general information, not legal advice. Consult an employment lawyer for guidance specific to your organisation.
2026 Federal Holidays
| Holiday | Date | Day |
|---|---|---|
| New Year’s Day | 1 January | Thursday |
| Martin Luther King Jr. Day | 19 January | Monday |
| Presidents’ Day | 16 February | Monday |
| Memorial Day | 25 May | Monday |
| Juneteenth National Independence Day | 19 June | Friday |
| Independence Day | 4 July | Saturday |
| Labor Day | 7 September | Monday |
| Columbus Day | 12 October | Monday |
| Veterans Day | 11 November | Wednesday |
| Thanksgiving Day | 26 November | Thursday |
| Christmas Day | 25 December | Friday |
Note: Independence Day (4 July) falls on a Saturday in 2026. Federal employees will observe Friday 3 July as the substitute day.
Federal Employees vs. Private Sector
Federal Employees
Federal employees are entitled to paid time off on all 11 federal holidays under 5 U.S.C. § 6103. When a holiday falls on a Saturday, the preceding Friday is observed. When it falls on a Sunday, the following Monday is observed.
Private-Sector Employers
Private employers have no federal obligation to close on federal holidays or pay extra for holiday work. Your obligations depend on:
- State laws — Some states require premium pay for work on specific holidays
- Employment contracts — If your contract promises holiday pay, you must provide it
- Collective bargaining agreements — Union contracts often mandate holiday pay
- Company policy — If your handbook promises holidays, you must honour them
Most private employers voluntarily observe 6-8 federal holidays and pay for them.
How to Pay Employees on Federal Holidays
Salaried (Exempt) Employees
Exempt employees under the Fair Labor Standards Act (FLSA) must receive their full salary regardless of whether they work on a holiday or the office is closed. You cannot dock pay for a holiday.
Hourly (Non-Exempt) Employees
Non-exempt employees have no federal right to holiday pay. If the office closes and they don’t work, you’re not required to pay them. If they do work, you pay them their regular rate (unless state law or your policy requires premium pay).
When a Holiday Falls on a Weekend
Under federal law:
- Saturday holiday → Observed on the preceding Friday
- Sunday holiday → Observed on the following Monday
Private employers can choose to observe the actual day or the substitute day. Many follow the federal schedule for consistency.
Independence Day 2026: Falls on Saturday 4 July. Federal employees observe Friday 3 July. Private employers can choose either day.
State-Specific Holiday Requirements
Several states have laws that affect holiday pay:
| State | Requirement |
|---|---|
| California | No state-mandated holidays; premium pay rules apply to Sunday/holiday work in some industries |
| New York | Some retail employees entitled to holiday premium pay |
| Massachusetts | Premium pay required for Sunday/holiday work in retail |
| Rhode Island | Sunday and holiday premium pay for retail |
| Connecticut | Premium pay for work on certain holidays in some industries |
Always check your state laws — they may impose requirements beyond federal law.
Paid Holidays vs. Unpaid Holidays
Many employers offer paid holidays as a benefit, even when not legally required. Common approaches:
Fixed Holiday Schedule
- Close on 8-10 federal holidays
- Pay all employees for those days
- Simple to administer, easy to communicate
Floating Holidays
- Give employees 2-3 “floating” holidays to use at their discretion
- Employees choose days that are meaningful to them (religious, cultural, personal)
- Increasingly popular for diversity and inclusion
Combining Both
- Observe 6-8 fixed holidays
- Add 2-3 floating holidays
- Gives employees both shared time off and personal choice
Holidays and Overtime
When a holiday falls in a workweek where an employee works overtime:
- The holiday hours are included in the overtime calculation
- If the employee works 40 regular hours + 8 holiday hours, the holiday hours may push total hours above 40
- You may need to pay overtime on the holiday hours depending on your state and the employee’s schedule
This is a common payroll mistake — holiday hours count toward weekly overtime unless you have a valid alternative workweek arrangement.
Common Mistakes
Assuming Federal Holidays Apply to Everyone
Federal holidays are only mandatory for federal employees. Private employers have no automatic obligation to close or pay for holidays.
Ignoring State Laws
Some states require premium pay for work on specific holidays. Failing to check state requirements can result in penalties.
Forgetting Floating Holidays
If your handbook or offer letter promises floating holidays, you must provide them. Failing to honour them can result in breach of contract claims.
Not Tracking Holiday Pay
Keep records of which holidays employees observed and how they were paid. This protects you in case of a wage dispute.
Key Takeaways
- The US observes 11 federal holidays, but only federal employees are entitled to paid time off
- Private employers have no federal obligation to close on holidays or pay extra
- State laws and employment contracts may impose additional requirements
- When a holiday falls on a Saturday, the preceding Friday is observed; Sunday holidays are observed on Monday
- Exempt employees must receive full salary regardless of holidays
- Non-exempt employees have no federal right to holiday pay unless your policy or contract provides it
Managing holidays across a team with varying schedules, states, and contracts is complicated. Leave Balance tracks holiday entitlements by employee and state so you stay compliant without the manual work.