Working in the midst of a global pandemic can be extremely challenging. Although many companies have shifted to remote work, employees are finding themselves stretched thin. Between work, home, and the healthcare crisis, most employees are finding themselves without any time to relax and recuperate. This is where paid time off can be beneficial to both employees and the company.

Although leave policies that include accrued time off and even unlimited time off are great, granting federal holidays as paid time off is a great practice.

Ensure that your paid leave policy explains the observance of federal holidays and their payment status. By making sure that employees have complete clarity on all time off granted, HR can minimize any misunderstandings.

In this blog, we’ll take you through what a federal holiday is, whether businesses must grant them, and the federal holidays 2021.

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What is a Federal Holiday?

Federal holidays are the ten holidays recognized by the federal government through law 5 U.S.C. 6103. On these days all non-essential federal employees are given paid time off.

While Congress only has the authority to designate holidays for federal institutions, many state and private institutions have also made federal holidays paid time off for their employees. Most banks, schools, and post offices observe federal holidays.

Many state and local governments even have additional state holidays for their employees depending on local history.

Must Private Businesses Observe Federal Holidays?

Although federal holidays are not enforceable for private businesses, many companies do offer at least a few federal holidays as time off for their employees.

With companies like Google even going a step further and offering leave types like sabbaticals, it has become imperative for businesses to offer at least a few federal holidays to employees. According to the Business News Daily, most businesses give employees at least New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas as paid time off.

But there is no law that mandates federal holiday observances to be paid time off for private employees.

The List of US Federal Holidays in 2021

The federal holidays in the USA fall on these dates in 2021:

Friday, January 1 – New Year’s Day 2021
Monday, January 18 – Martin Luther King, Jr. Day
Monday, February 15 – President’s Day
Monday, May 31 – Memorial Day
Sunday, July 4 – Independence Day
Monday, September 6 – Labor Day
Monday, October 11 – Columbus Day
Thursday, November 11 – Veterans Day
Thursday, November 25 – Thanksgiving Day
Saturday, December 25 – Christmas Day

The List of Federal Holidays in 2021 for Businesses Infographic

What Happens When Federal Holidays Fall on a Weekend?

When a federal holiday in the United States falls on a Saturday, it is observed on the preceding Friday. If the holiday falls on a Sunday, it is observed on the following Monday instead.

For example, in 2021 Independence Day falls on a Sunday, and hence, employees are given an “in lieu of” holiday on Monday instead.

The list of Federal Holidays in 2021 being observed on different days are as follows:

Monday, July 5 – Independence Day
Friday, December 24 – Christmas Day
Friday, December 31 – New Year’s Day 2022

Private companies can choose to not provide these observed days in lieu of federal holidays falling on the weekend.

Which Federal Holidays are Fixed to Days of the Year?

The reason why the federal holidays of 2021 are different from the federal holidays of 2020 is that there are two kinds of federal holidays:

  • Fixed Date Federal Holidays: These are the federal holidays that fall on the same date every year. For example, Christmas Day, Independence Day, and New Year’s Day.
  • Fixed Day Federal Holidays: These are the federal holidays that fall on the same day and month each year. For example, MLK day is observed on the third Monday of every January.

US Federal Holidays

The Fixed Day Federal Holidays are:

Third Monday in January- Martin Luther King, Jr. Day
Third Monday in February- President’s Day
Last Monday in May- Memorial Day
First Monday in September- Labor Day
Second Monday in October- Columbus Day
Fourth Thursday in November- Thanksgiving Day

Frequently Asked Questions for the 2021 Federal Holiday Calendar

What are Bank Holidays in 2021?

US federal holidays are referred to as bank holidays or public holidays by the general public. Although these are misnomers, there is a grain of truth in it too. Bank holidays are usually the ten federal holidays followed by the US Federal Reserve Calendar.

Federal Holidays 2021 are Bank Holidays in 2021.

When did Memorial Day become a Federal Holiday?

According to History.com, on May 1868, General John A. Logan issued a decree that May 30 should be a nationwide commemoration day for the 620,000 soldiers killed in the Civil War. On what was then known as “Decoration Day”, Americans were to lay flowers and decorate the graves of the war martyrs. By 1890, every state of the Union considered it an official holiday.

But it was only in 1971, that federal law changed the observance of the holiday to the last Monday in May. Congress also extended the commemorations to include all American soldiers who were martyred in wars. This was when Memorial Day officially become a federal holiday.

How many Federal Holidays in a Year?

Typically, there are ten federal holidays in a year. The ten federal holidays 2021 are New Year’s Day, Martin Luther King Jr. Day, President’s Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas Day.

This year we have an extra holiday added in. In the federal holidays of 2021, New Year’s Day of 2022 is being celebrated a day before on December 31, 2021. It is happening because it falls on Saturday and is being observed a day earlier.

Are Federal Holidays Mandatory for Businesses?

Federal holidays are primarily government holidays. Congress only has the authority to designate paid holidays for federal institutions. There is no law making the observance of federal holidays mandatory for businesses.

Is Election Day a Federal Holiday?

In democracies across the world, national elections are only held on the weekend or are declared a federal holiday. Unfortunately in the United States, Election Day is not a federal holiday yet.

A 2018 Pew Survey found that 65% of American voters would be in favor of turning Election Day into a federal holiday. Unfortunately, no bill in Congress has received adequate bipartisan support for this so far.

In some states it is a public holiday:

  • Delaware
  • Hawaii
  • Illinois
  • Kentucky
  • Lousiana
  • Montana
  • New Jersey
  • New York
  • Virginia
  • West Virginia
  • Puerto Rico

Other states like California allow employees to take 2 hours of paid time off at the beginning or end of their day to vote. Be sure to check your state-wise regulations on time off rights.

Are Banks Closed on Columbus Day?

Yes, it is a federal holiday, and banks are closed on Columbus Day.

Are Banks Closed on Presidents Day?

Yes, it is a federal holiday, and banks are closed on President’s Day 2021.

Is Martin Luther King day Day a Federal Holiday?

Yes, MLK Day is a federal holiday and is observed on the third Monday in January.

Are Banks Closed on MLK Day?

Yes, banks are closed on MLK Day.

Is Labor Day a Federal Holiday?

Yes, Labor Day is a federal holiday and is observed on the first Monday in September every year.

Is Veterans Day a National Holiday?

The terms “National Holiday” and “Federal Holiday” are often used interchangeably. Veterans Day is a federal holiday.

Is New Year’s Eve/Day a Bank Holiday?

While New Year’s Day is a bank holiday, New Year’s Eve is not. New Year’s Eve is simply a regular working day for federal employees.

Is Good Friday a Federal Holiday?

Christmas is the only religious holiday within the list of ten federal holidays. Good Friday is not a federal holiday.

Is Juneteenth a Federal Holiday?

Juneteenth is celebrated on 19 June every year. Juneteenth commemorates the end of U.S. slavery and began as a Texas holiday in 1980.

Unfortunately, despite bills to make Juneteenth a federal holiday, it is not one at the moment. Although, it is now recognized by 47 states as a state observance.

Is Columbus Day a Federal Holiday?

Yes, Columbus Day is a federal holiday. It is observed on the second Monday of October every year.

Is Inauguration Day a Federal Holiday?

Inauguration Day is a federal holiday but only for federal employees from Washington D.C., and a few surrounding areas.

Inauguration Day is observed on January 20 every year following the election year but it is not a nationwide federal holiday.

Is Christmas Eve a Federal Holiday?

No, Christmas Eve is generally not a federal holiday.

But in 2020, former President Donald Trump signed an executive order to make Christmas Eve a federal holiday in the United States that year. This was the reason Christmas Eve was one of the federal holidays in 2020.

In 2021, Christmas Day falls on a Saturday, and hence the federal holiday for Christmas will be observed on Christmas Eve.