US Federal Holidays vs State Holidays: What "Federal" Really Binds
A federal holiday closes federal offices. It does not oblige a private employer to give anyone the day off. Here is what each layer of the US holiday system actually controls.
An operations manager in Texas assumes the office is closed on Columbus Day because it is a federal holiday. The bank branch down the road is shut, the post office is shut, but half the team is online and a client in another state expects a delivery. The confusion comes from a single word. In the United States, "federal holiday" describes who is closed, not who must be.
What a federal holiday is
Federal holidays are set by Congress and apply to federal employees and federal government offices, plus the District of Columbia. There are currently eleven:
| Holiday | Rule |
|---|---|
| New Year's Day | 1 January |
| Birthday of Martin Luther King Jr. | Third Monday in January |
| Washington's Birthday (often called Presidents' Day) | Third Monday in February |
| Memorial Day | Last Monday in May |
| Juneteenth National Independence Day | 19 June |
| Independence Day | 4 July |
| Labor Day | First Monday in September |
| Columbus Day | Second Monday in October |
| Veterans Day | 11 November |
| Thanksgiving Day | Fourth Thursday in November |
| Christmas Day | 25 December |
Juneteenth is the newest, added in 2021. Inauguration Day is also a holiday every four years, but only for federal employees in and around Washington, D.C.
The Monday-based rules come from the Uniform Monday Holiday Act of 1968, which took effect in 1971 and moved several holidays to fixed Mondays to create three-day weekends. Veterans Day was briefly moved too, then returned to 11 November later in the 1970s.
What a federal holiday does not do
There is no federal law requiring private employers to give staff the day off on a federal holiday, or to pay extra for working on one. Whether you get Memorial Day off, and whether you are paid for it, depends on your employer's policy, your contract or a collective agreement. Many private employers offer a set of paid holidays that overlaps with the federal list, but the overlap is a policy choice. Some states and cities have their own rules on pay and scheduling, so check your contract and local rules.
In practice this creates three tiers of closure on a typical federal holiday:
- Almost always closed: federal agencies, the postal service's regular delivery, federal courts.
- Usually closed: banks that follow the Federal Reserve schedule, many schools, state offices where the state also observes the day.
- Depends entirely on the employer: private offices, shops, factories, logistics and most of the economy.
Columbus Day and Veterans Day show the gap most clearly. Federal offices close, but many private employers stay open, and the major stock exchanges trade on both days. Conversely, the exchanges close on Good Friday, which is not a federal holiday at all.
State holidays
Each state sets holidays for its own government employees and state offices. Most states adopt the federal list in whole or in part and then add, rename or drop days. A few examples of how that plays out:
- Massachusetts and Maine observe Patriots' Day on the third Monday in April.
- A number of states give state employees the day after Thanksgiving off.
- Some states and cities observe Indigenous Peoples' Day on the second Monday in October, either instead of or alongside Columbus Day, and some do not observe either.
- Several states observe holidays with regional significance, such as California's Cesar Chavez Day on 31 March.
Like federal holidays, state holidays bind state government. They do not by themselves force a private business in that state to close. State lists also change through legislation, so treat any list as a snapshot and check the official state source.
Observed dates when a holiday falls on a weekend
For federal employees, a holiday that falls on a Saturday is observed on the preceding Friday, and one that falls on a Sunday is observed on the following Monday. Many private employers copy this rule, but not all. Banks are a notable exception: the Federal Reserve generally does not close on the Friday before a Saturday holiday, so banks may be open on a day when federal offices are shut.
Worked example: two awkward months
July 2026. Independence Day, 4 July 2026, is a Saturday. Federal employees observe it on Friday 3 July. July 2026 has 23 weekdays, so a federal office has 22 working days that month. A private employer that does not adopt the observed-date rule has all 23, and a bank following the Federal Reserve schedule will typically be open on 3 July too.
December 2027. Christmas Day 2027 is a Saturday, observed on Friday 24 December. New Year's Day 2028 is also a Saturday, so it is observed on Friday 31 December 2027. December 2027 has 23 weekdays.
| Federal office | Employer with no observed days | |
|---|---|---|
| Weekdays in December 2027 | 23 | 23 |
| Christmas observed (Fri 24 Dec) | −1 | 0 |
| New Year observed (Fri 31 Dec) | −1 | 0 |
| Working days | 21 | 23 |
The New Year case is the one that catches people out: the observed holiday falls in the previous calendar year. If your annual leave or holiday entitlement is counted per calendar year, decide in advance which year that day belongs to.
Practical steps
- Write down your own organisation's holiday list rather than pointing staff to "federal holidays". Say explicitly whether you use observed dates.
- For contracts with "business day" deadlines, define which calendar applies. A federal calendar, a bank calendar and your own calendar can differ.
- Use the United States holiday calendar to check federal dates, then layer state days on top for each location.
- When counting delivery or notice periods, run the dates through the add business days tool with the correct holiday set.
- Plan around the Monday holidays early; the 2027 US long weekends are where leave requests concentrate.
