What are floating holidays?

Floating holidays are days off employees can use at their discretion. It’s typically offered in addition to paid time off (PTO), vacation time or as a substitute for a public holiday (e.g., religious holidays or special events). Employees can use floating holidays for various reasons. For example, they may take time off to celebrate an anniversary or birthday that falls on a weekday or for religious or cultural observances.

Benefits of offering a floating holiday policy

A floating holiday can help boost employee morale, flexibility and inclusion at your company. Here are a few potential benefits of the policy:

• Flexibility: Giving your employees the opportunity to choose their days off may help them manage their schedules outside of work. It can also promote a healthy work-life balance , which may increase productivity and reduce burnout.
• Talent retention: Floating holidays may attract potential job seekers as they generally indicate flexibility and show that you value their personal time.
• Cultural inclusion: By offering floating holidays, you can embrace a range of cultures and religions. This lets employees observe religious or cultural holidays that may not be on the company calendar.
• PTO preservation: Floating holidays let employees save their PTO for vacation, sick days or other personal needs. They also give employees the option to extend their existing vacation for regularly scheduled holidays, such as Thanksgiving.
• Enhanced holiday policy: A floating holiday can be used to compensate for times when employees must work on a standard holiday, allowing them to take time off on another day of their choosing.

Considerations for your floating holiday policy

Consider communicating every decision regarding floating holidays in your employee handbook and PTO policy. Make sure to clearly define each type of PTO you offer to ensure employees understand the differences between floater holidays, paid vacations and mandatory holidays.

Several aspects may be considered when determining whether floating holidays could benefit your company. Floating holidays can improve work-life balance, diversity and overall productivity.

However, you might offer alternatives, such as unlimited vacation policies or flexible scheduling. These factors may help you design your company’s floating holiday policy.

When can employees take floating holidays?

Employers may make floating holidays only available for specific celebratory days that the company remains open, such as employee birthdays or cultural, religious or state/federal holidays. If your company frequently has quick turnaround times, where deadlines must be met on a specific day each week, or you have a regular busy season, it may be a good idea to note these days or weeks in your policy as non-float days.

How many floating holidays do employees receive per year?

Some companies may offer employees two floating holidays per year on their first day of work. For example, a company may specify employees hired during the first half of the calendar year receive two available floating holidays, while employees hired during the second half of the year might receive one.

What’s the procedure for requesting a floating holiday?

You likely also need to decide how far in advance employees should request their floating holiday and whether they need manager approval. Consider implementing a time off request form or system for these floating holidays, similar to any existing systems for tracking other types of paid leave.

Related: How to Create a Time Off Policy

FAQs about floating holidays

Can employees carry their floating holiday over to the next year if they don’t use it?

It’s up to you to decide if employees can carry over floating holidays. Some employers specify that floating holidays must be used by the end of the calendar year or they may be forfeited.

Other companies might pay an employee for unused days if they’re leaving the organization. You can specify these accrual details in your floating holiday policy.

Do you have to pay for unused floating holidays?

Depending on your company’s policy, floating holidays may or may not be part of employees’ wages. If a floating holiday can be taken at any time, it may also be considered vacation time.

What is the difference between a vacation day and a floating holiday?

Employees typically start with a certain number of standard vacation days. These are typically accumulated over time, giving long-term employees the option to take an extended vacation or leave of absence.

Floating holidays, on the other hand, are usually part of the benefits package an employee receives when they start working for the company. They generally can’t be accumulated, and some companies may reset them after the business year is over.

Are there disadvantages to implementing a floating holiday policy?

The biggest disadvantage of floating holiday policies is the potential for scheduling issues. Scheduling mishaps can arise when multiple employees opt to take floating holidays at the same time. However, employers can often avoid this by requesting all workers stagger their days off to accommodate the company schedule.

Some companies may also let multiple workers take off the same day if they work in different departments or oversee separate projects.