Labor Day, always the first Monday in September, was created by and for the labor movement. It is dedicated to the social and economic achievements of American workers. It celebrates the contributions workers have made to the strength, prosperity and well being of our country. The first years it was celebrated was in 1885 and 1886. The first state bill was introduced in New York legislature, but the first to be passed was in Oregon on February 21, 1887. Colorado, Massachusetts, New Jersey and New York followed behind quickly creating the Labor day holiday. By 1894 4 other states Connecticut, Nebraska, and Pennsylvania had joined in the chime. By June 28, 1894 congress passed an act making the first Monday in September of each year a legal holiday.
Labor Day. The first governmental recognition came through municipal ordinances passed during 1885 and 1886. From these, a movement developed to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During the year four more states — Colorado, Massachusetts, New Jersey, and New York — created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 other states had adopted the holiday in honor of workers, and on June 28 of that year, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.
source Department of Labor