Public holidays in the United States and how they affect pay
Reviewed by Mellow Editorial Team, HR & payroll content team
Federal law does not require private employers to pay employees for public holidays, or even to give them the day off. How holidays affect pay depends almost entirely on your company policy, employment contracts, and — in some cases — state law.
The federal public holidays
The United States has eleven federal public holidays, established under 5 U.S.C. § 6103. They apply automatically to federal government employees. For everyone else, they serve as the conventional list that most businesses use as a reference point when writing their own holiday policies.
The eleven federal holidays in 2026 are:
- New Year's Day — January 1
- Martin Luther King Jr. Day — January 19
- Presidents' Day (Washington's Birthday) — February 16
- Memorial Day — May 25
- Juneteenth National Independence Day — June 19
- Independence Day — July 4
- Labor Day — September 7
- Columbus Day — October 12
- Veterans Day — November 11
- Thanksgiving Day — November 26
- Christmas Day — December 25
When a holiday falls on a Saturday, the federal government observes it on the preceding Friday. When it falls on a Sunday, it shifts to the following Monday. Private employers are free to follow the same pattern or set their own observance dates.
What private employers are actually required to do
Very little, at the federal level. The Fair Labor Standards Act (FLSA) does not require private employers to:
- Close on any holiday
- Pay employees extra for working on a holiday
- Provide paid time off in lieu of a holiday
Because the United States has no federal statutory paid annual leave or sick leave, holiday pay is a matter of contract and policy, not legal entitlement. If your employee handbook says the company gives ten paid holidays a year, that policy is enforceable — but it exists because you created it, not because a law mandated it.
State law adds some nuance. A handful of states have rules that restrict certain types of businesses from operating on specific holidays (Rhode Island and Massachusetts, for example, have historically limited Sunday and holiday retail operations). Always check your state's labor laws before assuming the federal baseline is the whole picture.
How holiday pay typically works for hourly and salaried employees
Hourly employees only get paid for hours worked. If your policy gives hourly workers a paid holiday, you are voluntarily adding a day's pay for a day not worked. If a non-exempt hourly employee works on a holiday, the FLSA requires overtime only if they cross 40 hours in the workweek — holiday work itself does not trigger a premium rate under federal law, though your policy or a collective bargaining agreement might.
Salaried exempt employees must receive their full weekly salary for any week in which they perform work, regardless of holidays. If your business closes for Thanksgiving and a salaried exempt employee does no work that week, you may generally dock that week's salary without violating the FLSA's salary-basis test — but only if the closure covers a full workweek. A partial-week closure is trickier: docking an exempt employee's pay for a company-imposed holiday can jeopardize their exempt status. The safer approach is to grant paid holidays so their salary is unaffected.
Running payroll around holidays
Holidays create two practical payroll problems: delayed bank processing and missed deadlines.
ACH transfers (the mechanism behind most direct deposit payroll) do not process on federal holidays. If your regular payday falls on a federal holiday, funds will not hit employee accounts that day. You need to either run payroll early — often one or two business days ahead — or notify employees of the delay and ensure the actual payment date still meets your state's payday frequency requirements.
States differ on whether a holiday is an acceptable reason to pay late. Several states require that wages due on a holiday be paid on the preceding business day. Build a payroll calendar at the start of each year that flags every conflict between federal holidays and your normal pay dates, so you are not scrambling in late November or over the December-January period.
Form 941 (your quarterly federal payroll tax return) and deposit deadlines also shift when they fall on a weekend or federal holiday — the IRS moves the due date to the next business day. The same rule applies to W-2 distribution: the January 31 deadline advances to the next business day if it lands on a weekend or holiday. Tracking these shifts is straightforward once you have a holiday-aware payroll calendar in place.
Writing a clear holiday policy
A workable holiday policy answers four questions:
1. Which holidays are observed, and on what dates?
2. Are they paid or unpaid for each worker classification?
3. What happens if an employee works on a designated holiday?
4. How are part-time or variable-hours employees treated relative to full-time staff?
Put the answers in your employee handbook, apply them consistently, and review them each calendar year. Inconsistent application — paying some employees for a holiday but not others in similar roles — creates discrimination risk and erodes trust. Consistency is straightforward once the policy is written down clearly.
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