What Is a Floating Holiday?
A floating holiday is a paid day off that employees can take at their discretion, separate from standard paid time off (PTO), vacation days, or sick leave. Unlike traditional holidays with fixed dates (like New Year’s Day or Independence Day), floating holidays allow employees to “float” their time off to a date of their choosing.
How Do Floating Holidays Work?
Floating holidays are designed to provide flexibility and support diverse employee needs. Companies may structure them in various ways:
- Some allow employees to take any day off as a floating holiday.
- Others provide a list of approved events or religious/cultural observances.
- Certain periods (like peak seasons) may be designated blackout dates, when floating holidays can't be used.
Floating holidays are optional for U.S. employers, there’s no federal or state mandate requiring them, but offering them is a common way to enrich benefits and improve morale.
Common Reasons Employees Use Floating Holidays
Employees may use floating holidays for:
- Religious or cultural holidays not recognized as official company holidays
- Personal celebrations (e.g., birthdays, anniversaries, weddings)
- Extra time off for long weekends or rest and recovery
Why Should Employers Offer Floating Holidays?
Floating holidays provide value to both employees and organizations. Key benefits include:
- Increased flexibility to accommodate personal schedules and beliefs
- Support for cultural and religious diversity across the workforce
- Improved employee morale and satisfaction
- Compensation for working on a public or company holiday
They also help attract and retain talent by showcasing a modern, inclusive, and employee-first workplace culture.
What to Include in a Floating Holiday Policy
To manage expectations and ensure consistency, include clear guidelines in your employee handbook. Key elements of a good policy:
Eligibility
- Are floating holidays available to all employees?
- Are they limited to full-time staff or also available to part-time/contractors?
Number of Floating Holidays
- Most companies offer 1–2 floating holidays per year.
- Some benefits are prorated based on hire date (e.g., employees hired after July 1 only get one floating holiday).
Carryover Rules
- Do unused floating holidays expire at the end of the calendar year?
- Will they be paid out if an employee leaves the company? (Check your state’s labor laws.)
Scheduling and Approval
- Require employees to request their floating holiday in advance.
- Indicate the notice period required (e.g., 5 business days).
- Managers should approve based on team workload and coverage.
Blackout Dates
- Specify dates when floating holidays cannot be taken due to high business demands (e.g., holiday season in retail or quarter-end for finance teams).
Tracking and Reporting
- Use your PTO tracking software or HRIS to record floating holiday usage.
- Communicate clearly during onboarding and annual benefits review cycles.
Floating holidays are a simple yet powerful way to enhance employee flexibility, support inclusion, and encourage work-life balance. By crafting a clear, well-communicated policy and encouraging use of the benefit, you can help employees feel seen, supported, and valued, on their terms.
