xmas is federal holiday
xmas Day is recognized as a federal holiday with specifically Christian origins.
like xmas?
Christmas is held during the winter solstice days, just after the solstice itself.
Most religions have celebrations during the winter solstice.
Thus, most companies, and also government agencies. allow a holiday or holidays around that time.
In the United States, which has predominantly Christian beliefs, the federal government recognizes this and tends to label these holidays as 'Christmas Holiday'.
Many government agencies also put up a Christmas tree (which really comes from Saturnia celebrations).
Oddly enough, most religions don't particularly celebrate the summer solstice. I guess everyone is out enjoying the summer.
Now to the 1st amendment:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
This amendment applies only to Congress. It does not apply to any State, private organization, or individual.
It cannot create any law that establishes a state religion nor bans any free exercise of any religion.
Putting up a Christmas tree is not a law.
Giving federal employees paid time off for a list of holidays is not establishing a religion, even if one of those holidays is 'Christmas break'.
Private companies also tend to observe a 'Christmas break', but are not required to.
A Christmas holiday is not banning any religion either, or prohibiting it's free exercise.