Floating holidays — you might have heard this term floating around more often than before. But what does it mean and why is it relevant for modern workforce management?

Just imagine: it’s a hot day and a great way to cool off is to swim in a pool. If you can float to beat the heat and relax, why not take a floating holiday to ensure you’re taking advantage of all offered work benefits? This type of holiday is a paid day off that is not attached to a specified date or holiday. It floats, just like you float in your pool.

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This article covers:

• What Is a Floating Holiday?
• Floating Holidays vs. PTO
• Floating Holidays vs. Paid Holidays
• Floating Holidays vs. Personal Days
• How Is a Floating Holiday Used?
• Pros and Cons
• What Should a Floating Holiday Policy Include?
• FAQs
• Next Steps

What Is a Floating Holiday?

A floating holiday is a paid leave that employees can take whenever they like. These holidays are not fixed to a specific date and ‘float’ around to when employees want to take them at their discretion. Employers provide floating holidays in addition to regular paid holidays to maximize benefits for employees.

Floating Holidays vs. PTO

Floating holidays work more or less like PTOs, and employees can take them at their discretion. However, there are a few key differences. Most companies don’t allow employees to carry over floating holidays to the next year, unlike PTOs, which they can.

Sometimes, when floating holidays aren’t tied to a specific event, you’d have to pay it out during termination according to your state’s PTO policy. Not every state mandates this, so do check with your state and local laws for more information.

Some companies offer floating holidays tied to specific events like Christmas Eve, and it’s up to the employee to cash them in or not. In those cases, if an employee quits their job in August, they won’t receive pay for the Christmas Eve holiday as it’s tied to and conditioned upon their employment through Christmas Eve.

Floating Holidays vs. Paid Holidays

The biggest difference between the two is that paid holidays are tied to a specific date or event, while floating holidays are not. For example, you can take a floating holiday for a Super Bowl viewing party if you’d like.

Paid holidays are national, state or religious holidays employers can choose to give as compensated days off for employees. However, it’s not mandatory to provide floating holidays or even paid holidays. Federal law doesn’t mandate it, and the Fair Labor Standards Act (FLSA) only has minimum wage and overtime pay requirements.

However, many organizations typically give out the following U.S. federal holidays:

• New Year’s Day: January 1
• Martin Luther King, Jr. Day: Third Monday of January
• President’s Day (George Washington’s Birthday): Third Monday of February
• Memorial Day: Last Monday in May
• Juneteenth: June 19
• Independence Day: July 4
• Labor Day: First Monday in September
• Indigenous Peoples’ Day (also observed as Columbus Day): Second Monday in October
• Veterans Day: November 11
• Thanksgiving Day: Fourth Thursday in November
• Christmas Day: December 25

Other employers may choose federal legal holidays, which results in 11 paid holidays annually.

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Floating Holidays vs. Personal Days

Employees usually take personal days for:

• Jury duty
• Family emergency
• Moving out
• Medical appointments that take a long time

Another difference is that giving personal days is a worldwide practice, while floating holidays are a U.S. phenomenon.

How Is a Floating Holiday Used?

Employees may take floating holidays for:

• Celebrating a non-U.S. holiday (like Diwali or Chinese New Year).
• Taking a mental health day.
• A birthday or anniversary.
• Extending their vacation (taking July 5th off after the Fourth of July).
• Celebrating a cultural event with their families.
• Relaxing at home after a stressful work period.

Some organizations might have a predetermined list of when an employee can take a floating holiday. For example, they may permit holidays for specific religious or cultural events where. Other companies may define a set of acceptable reasons for taking a floating holiday. If you’re a department manager, you can decide the process for taking a leave.

For employees, they should ask themselves the following questions when taking floating holidays:

• Are there blackout dates where they can’t use pre-planned PTO?
• Is there a limit to floating holidays for cultural, religious or federal holidays?
• How much advance notice do you need to use a floating holiday?
• Who qualifies for a floating holiday?
• When will time off be made available?

Can floating holidays be carried over to next year?

It totally depends on your company policy — you can choose whether to carry over floating holidays to the next year or limit them to the current year. However, the standard practice is that floating holidays are not allowed to be carried over to the next year, while PTO can be. This just makes it easier to plan resources.

This way, you can also minimize staff shortages by preventing employees from collecting PTOs and floating holidays over time and taking prolonged periods of time off.

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Pros and Cons

Pros

• Promote diversity and inclusion
• Enhance work-life balance
• Increase employee satisfaction and retention
• Attract and retain new talent

Another benefit is that you can stay open during public holidays. Suppose you have an employee who celebrates Ramadan but doesn’t celebrate Christmas. They can take a floating holiday whenever they’d like and work during Christmas. It allows you to continue operations without a complete shutdown.

It should also be noted that younger generations, Millennials and Gen Z in particular have different priorities than the older ones. They value work-life balance and appreciate flexibility in their jobs so they can pursue non-work-related activities in their leisure time. Floating holidays can be a great way to ensure that.

Cons

• Increased admin workload
• Can be short-staffed during holidays
• Scheduling issues limit approval options
• May be state-mandated to pay for unused days
• It might affect morale if some holidays are approved but others aren’t

Despite its numerous benefits, providing floating holidays can sometimes leave you short-staffed and busy beyond what you can manage. To avoid that, take a look at your floating holidays policy.

What Should a Floating Holiday Policy Include?

The main reason for establishing a policy is to define expectations so you can avoid stressful and unnecessary hiccups in the future.

Firstly, you should define what exactly a floating holiday is because not all employees you onboard may be aware of it.

The policy should include details about:

• If it’s available to full-time and part-time employees
• How far in advance should it be scheduled
• When can new employees start using them
• Is it available at the beginning of the year or earned throughout the year
• How do you track it

It’s also important to mention blackout dates or periods where you don’t permit employees to take floating holidays. This ensures you’re not short-staffed or busy during certain cultural events.

You should also note any restrictions you have on when or how employees can use the holiday. Define things like how many days they can take at a stretch and the maximum number of employees that can take floating holidays in a given period.

Lastly, decide if you’d like a predetermined list of religious and cultural holidays or any acceptable reasons for when employees can use floating holidays. If not, you can provide full flexibility as to when employees can take them.

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FAQs

How do you ask for a floating holiday?

It’s best to check your company’s holiday policy before applying for leave. If needed, you must specify the reason or event for taking a floating holiday. You must have your request scheduled and approved in advance by your supervisor.

If you’re planning to take floating holidays during a busy time of the year, it’s helpful to finish your work beforehand and let your supervisor know your action plan for when you return.

Can a floating holiday be used to cover a sick day?

Yes, you can use floating holidays as sick days or vacation days that you have already used. By providing employees with floating holidays, you give them a chance to take time off without using vacation time, helping you retain them.

Are floating holidays a good idea?

Floating holidays help promote inclusion and diversity and ensure employees can celebrate events that are important to them. They also improve work-life balance and flexibility, which younger generations value.

They help you enhance productivity in the long run and reduce burnout, boosting morale and encouraging employee retention.

Are floating holidays paid out?

Depending on the country and state you’re in, floating holidays can be paid in full. Some places pay only a percentage of the rate while an employee is on leave. In the U.S., floating holidays can be paid or unpaid depending on if the state mandates payment. For example, in California, you must pay for a floating holiday unless it’s attached to a national holiday or cultural event.

Can floating holidays be denied?

Yes, a company reserves the right to deny a floating holiday request. The Fair Labor Standards Act mandates requirements around minimum wage and overtime pay but doesn’t have mandates about PTO or floating holidays. So, you can accept or reject a floating holiday request depending on company policy and operations. However, do check your state’s laws, as they may vary and have different expectations.

Do floating holidays expire?

The general practice is that, unlike PTO, employees can’t roll over floating holidays to the next year. However, it depends on the company policy. You can choose to allow employees to collect floating holidays for the next year or to limit them to the current year. Do check out your state’s laws and mandates for more information about floating holiday expectations.

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Next Steps

Floating holidays are becoming imperative, with diversity and inclusion becoming a mainstream focus of more and more businesses. More employees, especially the younger ones, want more flexibility in their schedules. Providing floating holidays ensures that all employees can celebrate the events most important to them.

Looking to manage your workforce more effectively and wish there was an easier way to do so? Workforce management software makes it easier to manage employee scheduling and make sure the right people are in the right place at the right time. But yes, choosing software can be a huge ordeal in itself — how do you start, and where do you even begin searching?

Our free comparison report is a good starting point. It allows you to compare different software options in the market and see how they fare in terms of benefits, features and limitations. Good luck!

How do you think floating holidays will benefit your business? Let us know in the comments below!