Common Paid Federal Holidays That Small Businesses Can Offer

As a small business owner, are you wondering which holidays to offer as paid time off for your employees? While there’s no legal requirement for small businesses to provide paid holidays as part of a paid time off (PTO) policy, offering them can be a great way to attract and retain top talent, boost employee morale, and show appreciation for the team's hard work.

Let’s explore the most common paid federal holidays that small businesses can offer and why they’re valuable for your employees.

What is a Federal Holiday?

Federal holidays refer to 11 dates that have been designated by the U.S. government as official holidays. This means that non-essential federal offices are closed on those days, and federal employees get these days as paid holidays. While the government can only create holidays for government institutions, many other institutions will be closed on those national holidays as a general rule — think schools, banks, and financial markets.

Before we dive into the specific holidays small businesses can offer, let's first establish why offering paid holidays is important.

Why Offer Paid Holidays?

There's no law that mandates that small businesses in the private sector give their employees federal holidays off, whether paid or unpaid. However, there are some pretty good reasons for you to consider offering these paid holidays.

Attract and Retain Top Talent

In today's competitive job market, offering paid holidays can be a great way to attract and retain great employees. Many job seekers consider the PTO policy as an important factor when evaluating job offers. By offering paid holidays, your small business might be more attractive to candidates, increasing your chances of hiring and retaining the best of the best.

Boost Employee Morale

Paid holidays can also have a positive impact on employee morale. When employees feel appreciated and valued, they’re more likely to be motivated and engaged in their work. Offering paid holidays shows your team that you care about their wellbeing and work-life balance, which can lead to increased job satisfaction and productivity.

Show Appreciation for Your Team

Increased productivity and engagement are great, but it’s also important to show your employees appreciation just for the sake of doing so. By giving them time off to spend with their loved ones and recharge, you’re acknowledging their contributions to your business and fostering a positive company culture. Offering paid holidays is one way to show your team how much you appreciate their hard work and dedication. And when you do that, everyone wins.

The Most Common Paid Holidays for Small Businesses

Now that we’ve established the importance of offering paid holidays as part of your PTO policy, let's take a look at the most common holidays that small businesses can offer.

New Year's Day

New Year's Day is a federal holiday that’s observed on January 1 every year. It’s traditionally a time for new beginnings and is often celebrated with family and friends. Many small businesses choose to offer this day as a paid holiday to give their employees time to rest, recharge, and refocus after the hectic holiday season.

Martin Luther King Jr. Day

Martin Luther King Jr. Day is another federal holiday, and it’s observed on the third Monday in January. This day honors the life and legacy of civil rights leader Martin Luther King Jr. Offering this day as a paid holiday can show respect and support for diversity and inclusion.

President's Day

President's Day is — you guessed it — another federal holiday, and it’s observed on the third Monday in February. This day honors all past and present U.S. presidents. Many businesses elect this as a paid holiday to give their teams a long weekend to relax and spend time with family and friends.

Memorial Day

Memorial Day is a federal holiday that’s observed on the last Monday in May and honors those who have died while serving in the U.S. military. Small businesses can offer this paid holiday to show their support for the armed forces and any employees who are part of that community.

Juneteenth

Juneteenth is an important date that commemorates the emancipation of enslaved African Americans in the United States. Juneteenth is the most recently designated federal holiday, after gaining legal observance in 2021. It’s observed on June 19 each year and is becoming increasingly recognized as a paid holiday by small businesses and other organizations. Employers that offer Juneteenth as a paid holiday can show their support for racial equality by giving their employees the opportunity to honor and reflect on the significance of this historical event.

Independence Day

Independence Day (also known as the Fourth of July) is another federal holiday that’s observed on July 4 every year. This day celebrates the adoption of the Declaration of Independence and the birth of the United States. Many businesses offer this day as a paid holiday so employees have a chance to celebrate with their loved ones.

Labor Day

Labor Day is yet another federal holiday to add to the list. It’s observed on the first Monday in September and honors the contributions and achievements of American workers. When businesses choose this day as a paid holiday, it can show their appreciation for their employees' hard work and dedication.

Columbus Day

Columbus Day, a federal holiday observed on the second Monday in October, commemorates the arrival of Christopher Columbus in the Americas. Because of this holiday's ties to the history of imperialism and colonialism, some businesses may opt to offer this paid holiday under the banner of Indigenous Peoples' Day, which is celebrated on the same day (though it's not a federal holiday).

Veterans Day

Veterans Day is another federal holiday, which is observed on November 11 every year. This day honors all military veterans for their service. Businesses that offer this paid holiday can show their support for veterans and give their employees a chance to spend time with their families.

Thanksgiving Day

One of the more festive federal holidays, Thanksgiving Day is observed on the fourth Thursday in November. When small businesses offer this paid holiday, they give their employees a chance to celebrate and recharge as the busy holiday season begins. Since Thanksgiving always lands on a Thursday, consider offering your employees the Friday after the federal holiday off as well. If your business model allows, this can be a nice added perk for your team.

Christmas Day

Christmas Day is the last federal holiday of the calendar year and is observed on December 25 each year. This day honors both religious and secular celebrations of the season. Many employers offer this paid holiday to give their employees time to celebrate and spend time with their friends and family.

Other Considerations for Paid Holidays

As we’ve learned, there are a ton of federal holidays employers can offer as paid holidays (and a few non-federal holidays as well). While these holidays we’ve outlined are the most common, there are several other holidays that small business owners might choose to offer as paid time off. Some include:

• Easter Sunday

• Good Friday

• Hanukkah

• Kwanzaa

• Diwali

• Chinese New Year

• Eid al-Fitr

• Eid al-Adha

When deciding which holidays to offer as paid time off, it's key to consider the demographics of your team and their cultural and religious backgrounds. Offering a diverse range of holidays can go far in helping your employees feel included and valued. Employers might also consider offering floating holidays as part of the PTO policy so employees have more flexibility in choosing which holidays they want to celebrate with some time off work.

While there are no legal requirements for small businesses to offer paid holidays, it’s a common practice and it can really give your small business a leg up when it comes to hiring great employees. Consider the holidays mentioned here along with other cultural and religious holidays when deciding which paid holidays to include in your PTO policy.

Manage Your PTO Policy with Justworks PEO

Do you need an easier way to manage your PTO policy? Even if it doesn’t include all the paid holidays we’ve listed above, Justworks can help you (and your employees) manage PTO the easy way. With Justworks’ intuitive platform and easy-to-use HR tools, employers can set up PTO policies in minutes. Employees can request PTO and managers can approve them, too, all with the click of a button. If you’re ready to make PTO and paid holidays simpler to manage, get started with Justworks today!