Today is Christmas, which is a religious holiday for Christians around the world and a federal holiday in the U.S. When it comes to holidays, the rules for employers can be complicated. The word “holiday” in a business and employment context means a day off with pay. Here are some common questions…and the answers you should know.
What are the federal holidays in 2026?
The Office of Personnel Management lists the days designated as federal holidays in 2026:
- January 1: New Year’s Day
- January 19: Birthday of Martin Luther King Jr.
- February 16: Washington’s Birthday (Presidents Day)
- May 25: Memorial Day
- June 19: Juneteenth National Independence Day
- July 3: Independence Day (because July 4 falls on a Saturday)
- September 7: Labor Day
- October 12: Columbus Day
- November 11: Veterans Day
- November 26: Thanksgiving Day
- December 25: Christmas Day
Federal holidays are days that federal employees have off with pay and many government offices are closed. The U.S. Postal Service also closes on federal holidays, as do many banks and the New York Stock Exchange.
Private employers are not required to close on these days, although many do. They are not required to make these days company holidays.
Do you have to give employees time off for holidays?
There is no mandatory time off for employees of private employers. Nonetheless, many companies give paid time off for holidays. According to the U.S. Bureau of Labor Statistics, U.S. employees receive about 7.6 paid holidays each year. Employees in retail and hospitality tend to have fewer holidays, while those in technology and finance have more.
According to Gusto, small businesses usually offer the following paid holidays:
- New Year’s Day
- Memorial Day
- Fourth of July
- Labor Day
- Thanksgiving Day
- Friday after Thanksgiving Day
- Christmas
Good Friday and Easter Sunday are not federal holidays. Nonetheless, many businesses close on these days and pay employees for the time off.
Can employees be required to work on a federal holiday?
Again, federal holidays are not mandated for private employers, so yes, employees can be required to work on a day when the federal government is essentially closed. In 2025, most large retailers—Walmart, Target, Costco—were closed on Thanksgiving Day. But in the past, some stores did open on Thanksgiving Day and employees were required to work on this day. Walmart ended this practice in 2020, but closure was more about the pandemic than enabling employees to spend the holiday with family and friends. Still, it hasn’t been open on Thanksgiving Day since then.
Do you have to give extra pay for employees who work on holidays?
The general answer is no. Under the Fair Labor Standards Act, you only pay overtime for non-exempt (hourly) employees who work more than 40 hours in a work week.
But there may be situations where extra pay is required or helpful. Union contracts may demand extra pay for employees who work on holidays; employment agreements may do the same. Or it may be helpful to offer extra pay to get employees to volunteer to work on holidays if they are otherwise not required to do so.
How can you balance staying open with giving employees paid holidays?
Companies want to balance their need to stay open for business while at the same time giving employees a holiday. What to do? Some ideas:
- Offer a floating holiday. Allow employees to pick their own day off (assuming it can be approved). This enables employees to take time off for religious or other personal reasons. It can be one floating holiday or more.
- Get creative. My dad owned a small machine shop in the Bronx that was unionized. When holidays were negotiated, my dad agreed to make each employee’s birthday their paid holiday so he wouldn’t have to completely close up for a company-wide holiday.
Final thought
When it comes to holidays, employers have a lot of flexibility. Still, to attract and retain good employees, companies may have to be generous in their holidays. For example, when a holiday falls on a Thursday, give a paid holiday on Friday as well so employees get a long weekend. The same can be done when a holiday falls on Tuesday; give the Monday off as well. Employees appreciate a holiday.
Find other blogs written about federal holidays and your small business in this list here.
