What is a floating holiday?

Floating holiday definition and meaning

A floating holiday is flexible paid time off that employees can use to take a personal or vacation day, that is not tied to a specific holiday such as New Year’s Day or Christmas. Because this type of paid time off “floats” or shifts to the employee’s preferred date each year, it is known as a floating holiday.

Why do some employers offer floating holidays?

Floating holidays are a perk that is occasionally added to the mix during a company’s recruitment and retention efforts. This can be an especially helpful benefit for employers with a diverse workforce of employees, some of which may observe holidays that aren’t found on more traditional holiday schedules.

For additional perspective, we spoke with Ellen Slane, an HR Business Partner and Trainer at Employers Advantage, and a human resources professional with over 15 years of experience, specializing in policy and procedure. “Offering floating holidays is a great way to be inclusive and mindful of the diverse cultural and spiritual beliefs of your workforce,” she says. “It is a great way for them to feel recognized within the organization, and allows them to take time off to celebrate what matters to them without taking away from their PTO.” That said, this isn’t the only reason to establish a floating holiday policy.

A retail business who needs customer-facing teams to work on Black Friday, but gives corporate employees a paid day off, may consider offering retail staff a floating holiday to make this arrangement feel more equitable. But a floating holiday doesn’t even need to be associated with any holiday, and most employers don’t require that their employees have a cultural reason for using a floating holiday. Employees are typically allowed to use this time for whatever suits them, whether it’s to celebrate a birthday, start a do-it-yourself home project, or just “recharge the batteries.”

Helping your employees understand floating holidays

It’s common (and recommended) for employers to have policies and procedures in place that explain how floating holidays can be used, how employees can request them, and how they are earned. If only certain teams or roles receive this perk, be clear as to which teams get floating holidays, and why. To spell out the rules, most organizations include a section in their employee handbook to ensure their stakeholders have easy access to it.

Wondering what to include? Here are some of the most common details that should be outlined (and that employees should understand).

• Eligibility: Who is eligible for a floating holiday?
• Accrual: How many floating holidays are employees allowed in a year?
• Requests: Employees should know how to use a floating holiday, and how far in advance they need to request this time in order for the request to be considered.
• Restrictions: Are there any restrictions on when, or why, a floating holiday may be used? For example, your organization may have year-end obligations, or a retail space where there may be a few busy seasons a year. When it’s “all hands on deck”, and the entire staff needs to be available, establishing a floating holiday policy well ahead of time really saves employers and their workers a lot of grief.

We spoke with Ellen Slane once more, and she says there’s no reason to go overboard when putting together a policy. “In my experience, including floating holiday verbiage into a handbook can be short and sweet,” she says. Slane provides the following sample paragraph as an example of what you could include:

“Each full-time employee will receive two (2) floating holidays per calendar year. These days will not carry over into the next year nor will the employee receive compensation for any unused floating days should they leave the company. These may be taken in hour increments or as full days. Floating holidays are not taken into consideration when calculating overtime.”

It’s important to note that, while there’s no state or federal law requiring employers to offer floating holidays, if a business is looking for ways to stand out from the crowd when recruiting job candidates (and wants its top performers to stay put), floating holidays can be worth a closer look.