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What is a Floating Holiday?

Learn more about floating holidays and why employers offer them.
By Carolin Hewitt, Updated Jan 26, 2022
A happy person at the beach on a floating holiday.

Employers can offer their employees floating holidays as a benefit in addition to paid vacation days. While a great perk to attract top talent, floating holidays can also help employers create a more inclusive workplace and improve employee morale.

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What is a Floating Holiday?

Floating holidays allow employees to take paid time off for personal reasons or to observe a religious holiday not recognized by the state. A floating holiday is supplemental to a paid day off, meaning that employees can use floating holidays over and above paid federal holidays, their paid vacation days, and sick leave.

Some employers may also offer floating holidays to compensate employees for working on federal holidays. Because this type of holiday is not linked to a specific date, and the days when they are taken vary, they are moveable off-days and, therefore, called "floating" holidays.

Benefits of Floating Holidays:

  • They give employees more flexibility, contributing to a better work-life balance.
  • They can help employers attract top talent.
  • They allow for a more inclusive work environment that embraces cultural and religious diversity.

Things to Consider in a Floating Holiday Policy:

1. Who qualifies for floating holidays?

Make sure that the policy is applied fairly to every employee.

2. When can an employee take a floating holiday?

Some employers may decide that floating holidays can only be taken on specific days, such as on birthdays or for religious observances, or define specific dates, such as the company's busiest times of the year, as blackout dates, when no employee may take a floating holiday. You can also allow employees to take a floating holiday at any time.

3. Set guidelines for carry-over time.

You will need to decide whether floating holidays can be carried over to the next year or should be used within the same calendar year.

4. How an employee should schedule a floating holiday.

Must an employee schedule a floating holiday in advance, and should it be approved by a manager?

5. Track floating holidays like you would track paid vacation days.

Many companies use employee tracking software and payroll software to track both vacation and floating holidays.

6. What happens when an employee leaves?

Since floating holidays are considered the same as paid vacation days, you should pay out an employee if they leave the company.

FAQs:

What is considered a floating holiday?

Floating holidays are a fixed number of personal days that employees may use as paid time off at any time during the year and is over and above any vacation, sick, or other paid time off that is due to them. It is usually given when their religious practices don't match the standard holiday schedule or for personal reasons.

Is Thanksgiving a floating holiday?

Federal holidays are a combination of religious, civic, and traditional celebrations that would not be considered a floating holiday. Thanksgiving would fall under the traditional category.

Do floating holidays roll over?

Some employers may require employees to use their floating holidays before year-end, while others may allow them to roll over.

Is Christmas a floating holiday?

Federal holidays are a combination of religious, civic, and traditional celebrations that would not be considered a floating holiday. Christmas would fall under the religious category.

Is Martin Luther King Day a floating holiday?

Federal holidays are a combination of religious, civic, and traditional celebrations that would not be considered a floating holiday. Martin Luther King Day would fall under the civic category.

Is Easter a floating holiday?

Federal holidays are a combination of religious, civic, and traditional celebrations that would not be considered a floating holiday. Easter would fall under the religious category.

Am I required to offer floating holidays?

No. There are no laws that require you to offer floating holidays. However, many companies do offer floating holidays for a better work-life balance.

Why should I offer floating holidays?

Some employees may practice Judaism, Islam, or Hinduism and wish to observe a religious holiday, such as Rosh Hashana or Eid Al-Fitr; other employees may simply want to take their birthday off. Giving employees the option to take a day off when they need to shows that your organization cares about their diverse needs.

What should my floating holiday policy include?

If you decide to have a floating holiday policy, ensure that it has proper guidelines in place to avoid confusion between managers and staff. You should also check your state's labor laws to make sure that you comply with all rules and regulations concerning time off.

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