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2020 Federal Holidays for Business Owners

Joel Kranc
Joel Kranc

Here are the important holidays small business owners need to know about.

There are 10 federal holidays in the United States; however, as a small business owner, are you legally required to give your employees the day off?

According to the U.S. Department of Labor, "The Fair Labor Standards Act does not require payment for time not worked, such as vacations or holidays (federal or otherwise). These benefits are generally a matter of agreement between an employer and an employee (or the employee's representative."

What are federal holidays?

Federal holidays are those established and recognized by the U.S. federal government. When Congress began implementing federal holidays in the late 1870s, only federal employees in Washington, D.C., were granted time off. A few years later, that was extended to all federal employees. Originally there were four federal holidays, including:

  1. New Year's Day
  2. Independence Day
  3. Thanksgiving
  4. Christmas Day

Later, additional holidays were added. In 1879, George Washington's Birthday was added to the list of federal holidays, followed by Memorial Day in 1888 and Labor Day in 1894. Martin Luther King Jr. Day is the most recent holiday to be added. Ronald Reagan signed legislation in November 1983 honoring the late civil rights leader.

Although no laws mandate it, many private employers observe these 10 holidays by providing employees with a paid day off. Recognizing these holidays with a paid day off is a good way to keep employees happy and motivated.

What are the federal holidays for 2020?

Below is a list of all 10 federal holidays. For some, the actual date they are recognized stays the same, as long as the holiday doesn't fall on the weekend. For example, Christmas is always observed on December 25, unless it falls on a Saturday or Sunday. In those instances, the federal holiday may be observed on December 24 or 26. Others are observed on different dates, depending on where they fall on the calendar. Thanksgiving, for example, is always observed on the fourth Thursday in November, and Labor Day is always the first Monday in September.

2020 federal holidays

  • Wednesday, Jan. 1 – New Year's Day
  • Monday, Jan. 20 – Martin Luther King Jr. Day
  • Monday, Feb. 17 – George Washington's birthday
  • Monday, May 25 – Memorial Day
  • Friday, July 3 – Independence Day
  • Monday, Sept. 7 – Labor Day
  • Monday, Oct. 12 – Columbus Day
  • Wednesday, Nov. 11 – Veterans Day
  • Thursday, Nov. 26 – Thanksgiving Day
  • Friday, Dec. 25 – Christmas Day

What are the federal holidays for 2021?

For 2021 the dates of the federal holidays are:

  • Friday, Jan. 1 – New Year's Day
  • Monday, Jan. 18 – Martin Luther King Jr. Day
  • Monday, Feb. 15 – George Washington's birthday
  • Monday, May 31 – Memorial Day
  • Monday, July 5 – Independence Day
  • Monday, Sept. 6 – Labor Day
  • Monday, Oct. 11 – Columbus Day
  • Thursday, Nov. 11 – Veterans Day
  • Thursday, Nov. 25 – Thanksgiving
  • Friday, Dec. 24 – Christmas Day

What are state holidays?

Besides federal holidays, states have designated additional days as state holidays. In Texas, for example, Christmas Eve, the day after Christmas and the Friday after Thanksgiving are all recognized as state holidays.

Other examples of unique state holidays include the following:

  • Nevada's Nevada Day is observed each year on the last Friday in October.
  • Georgia's Founding Day is Feb. 12.
  • Wisconsin has several, including Casimir Pulaski Day on March 4 and Robert La Follette Sr. Day on June 14
  • Hawaii celebrates Kamehameha Day on June 11 to honor Kamehameha the Great, who created the Hawaiian monarchy in 1810.

What are public vs. private sector holidays?

Public employers are required to observe federal holidays. While private-sector employers may choose to observe these days, there are no laws requiring them to do so. Some businesses may close, but others may stay open with full or partial staffing. Some employers may choose to reward employees who work on those holidays with a pay incentive, such as time-and-a-half or double time to those employees who are scheduled to work.

What happens when a holiday falls on a weekend?

There are times when a holiday falls on a weekend. When that occurs, the holiday is observed either on the Friday preceding the holiday (if the holiday falls on Saturday) or Monday (if the holiday falls on Sunday).

What are paid holidays?

Some companies give paid time off to employees on holidays other than those considered federal holidays; this is at the discretion of the employer, however. These holidays might include the following:

  • Good Friday
  • Easter
  • The Friday after Thanksgiving
  • Christmas Eve
  • The day after Christmas (also known as Boxing Day)
  • New Year's Eve

What is holiday pay? 

Holidays observed by employers are typically considered paid days off for employees. This means employees get the day off and are also paid their regular rate of pay.

Some employers might offer incentives for employees who work on those days. Examples of incentives include being paid time-and-a-half or double time or getting another paid day off.

Workers who are often exempt from holiday pay include:

  • Sales-commissioned employees
  • Drivers
  • Farm workers
Image Credit: Kerkez / Getty Images
Joel Kranc
Joel Kranc Contributing Writer
Joel Kranc is an experienced and award-winning editor, writer, and communications professional based in Toronto. He has covered many topics within the business and financial areas, especially within the large institutional investment space.