Presidents’ Day is a source of regular confusion for private sector employees because its observance depends entirely on company policy, not federal law. While the day is a paid holiday for government workers and those in federally regulated industries, its status in most workplaces is discretionary. The treatment of the holiday, officially known as Washington’s Birthday, varies widely across industries and company sizes. Understanding this distinction requires examining the holiday’s official designation, the definition of a floating holiday, and the authority of the employer’s internal policy.
The Official Status of Presidents’ Day
The holiday observed on the third Monday in February is legally designated by the federal government as Washington’s Birthday. This designation originated from an 1879 Act of Congress honoring George Washington. In 1968, Congress passed the Uniform Monday Holiday Act, which moved the observance of several federal holidays to Mondays to create long weekends for federal employees. This Act shifted Washington’s Birthday to the third Monday in February. Although the name “Presidents’ Day” was proposed during the legislative process to honor both Washington and Abraham Lincoln, the official federal name remains Washington’s Birthday. The popular name became common due to state observances and widespread advertising campaigns.
The designation as a federal holiday means that all federal government offices, including the U.S. Postal Service, are closed, and federal employees receive a paid day off. The Federal Reserve and most major banks also observe the day, resulting in a cessation of financial market activity. However, this federal recognition does not impose any requirement on private employers to grant the day off or provide paid holiday time. For Americans working outside the government sector, the holiday’s status is determined solely by their employer.
Defining the Floating Holiday
A floating holiday is a paid day off granted by an employer for an employee to use at their discretion, rather than on a fixed, company-wide date. This leave is separate from traditional vacation time or general Paid Time Off (PTO) accrual. The term “floating” means the day can be used on any date the employee chooses, provided they follow established request procedures. The purpose of this benefit is to provide flexibility and promote inclusion within a diverse workforce. Employees can use the day to observe a religious or cultural holiday not recognized on the standard company calendar, celebrate a personal milestone, or simply use it as a mental health day.
Companies typically set clear guidelines for their use, such as requiring the day to be used within the calendar year and requesting manager approval in advance. Floating holidays are usually provided as a set number of days in a lump sum at the start of the year, unlike vacation time which often accrues. Offering this flexibility empowers employees to manage their own time off needs and enhances the overall benefits package.
How Employers Typically Treat Presidents’ Day
The treatment of Presidents’ Day in the private sector generally falls into three categories, heavily influenced by industry trends.
Fixed Paid Holiday
The first group treats the day as a standard, fixed paid holiday, mirroring the federal government’s schedule. This approach is common in the financial services sector, where banks and brokerages must halt operations due to the closure of federal markets.
Floating Holiday
The second approach is to treat Presidents’ Day as a floating holiday. This gives the employee the option to take the day off or work and use the discretionary time on another date. This method is often adopted by companies that operate continuously or have a diverse workforce, granting the employee personal choice while maintaining operational flexibility.
Normal Business Day
The third and most prevalent approach, particularly among small businesses and in the retail and service industries, is to treat Presidents’ Day as a normal business day. These companies often remain open because the holiday is typically a busy day for shopping and dining, given that many other workplaces are closed. Employees are expected to work their regular schedules without any holiday premium pay.
The Role of Company Policy and Employee Agreements
The determination of whether an employee receives Presidents’ Day off rests entirely with the individual employer’s policies. Since there is no federal mandate, the employee handbook or internal policy documents are the governing source for all holiday schedules. These documents state which days are recognized as paid holidays, the rules for taking a floating holiday, and how holiday pay is calculated. For unionized employees, the terms of holiday observance and pay are negotiated and formally outlined within a collective bargaining agreement (CBA). This legally binding contract dictates the specific number of paid holidays and the conditions for using personal or floating days. Whether the policy is set by the company or agreed upon through a CBA, it must be clearly communicated and consistently applied.
Alternatives to Traditional Holiday Systems
Modern employment practices are increasingly moving away from fixed traditional holidays toward consolidated leave systems. These systems, often called Paid Time Off (PTO) banks, merge vacation days, sick leave, and personal time into a single, unified allocation. Employees are given a total number of days to use as they see fit, regardless of the reason. This mechanism simplifies administration for the employer, as there is only one category of time to track.
For the employee, this system offers complete control over scheduling time off, making the distinction between a fixed and a floating holiday irrelevant. If an employee wishes to take Presidents’ Day off, they simply draw the time from their PTO bank. This approach aligns with employee empowerment, allowing staff to prioritize personal and cultural observances without needing separate categories of leave.
Employee Rights Regarding Holiday Pay
The Fair Labor Standards Act (FLSA) does not require private employers to provide employees with paid time off for holidays. Whether an employee is paid for time not worked, such as on Presidents’ Day, is a matter of agreement between the employer and the employee. The federal government sets no minimum standard for paid holiday leave for the U.S. workforce. If an employer chooses to offer paid holiday time through a contract or handbook, they are obligated to follow the terms of that promise. The lack of a federal mandate means that if a private company does not recognize Presidents’ Day, employees have no legal right to the day off or to premium pay for working it.