The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union.
In 1884 the first Monday in September was selected as the holiday, and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a “workingmen’s holiday” on that date. The idea spread with the growth of labor organizations, and in 1885 Labor Day was celebrated in many industrial centers of the country.
In the USA, governmental recognition first came through municipal ordinances passed during 1885 and 1886. 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. 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.
There is a tradition of not wearing white after Labor Day. This fashion faux pas dates back to the late Victorian era. The Emily Post Institute explains that white indicated you were still in vacation mode, so naturally when summer ended so did wearing white.
Sources: US Department of Labor, PBS, US Census