A floating holiday is a flexible paid day off from work that employees can use at their own discretion.
The specific date of the floating holiday is undetermined until the employee “floats” the paid time off to the day of their choice.
What is a floating holiday?
Floating holidays are usually offered in addition to standard paid time off (PTO), sick days, and vacation time. Floating holidays boost employee morale and add to an employee benefits package.
Some organizations offer their employees free reign to choose any day off. Others list pre-approved holidays and events to use for floating days. In some instances, businesses have blackout dates that no employee can use (usually during busy times at work).
In the United States, there are no federal or state laws that require employers to offer floating holidays. However, the additional holiday pay offers benefits such as improving team morale and supporting diversity.
Take note: If you hire international employees, then it’s important to stay up to date with paid annual leave requirements per country.
How can employees use floating holidays?
As a flexible day off, employees can use floating holidays to meet various needs. Consider the following instances that employees use floating holidays as vacation days.
- Religious or cultural observances
- Special occasions such as a birthday or wedding
- General time off to recharge, such as relaxing at home or extending the weekend
Why should you offer floating holidays?
When added to a company’s benefits package, a floating holiday helps improve employee satisfaction and attract top talent.
- Provides flexibility to employees, allowing them to improve their work-life balance
- Encourages businesses to embrace other cultures and religious holidays
- Allows employees to accumulate more PTO for vacation, sick leave, and other personal days
- Used to compensate for times when employees have to work on a standard holiday (such as a public holiday or other federal holidays)
What to include in your floating holiday policy
A floating holiday is a great perk to offer employees, but it needs to be governed by a floating holiday policy to streamline communication and avoid misunderstandings. The human resources team should include these details in the employee handbook and mention them during the onboarding process.
Consider the following floating holiday FAQs when drafting your PTO policy.
When can employees take floating holidays?
Stipulate whether an employee can take a floating holiday at the beginning of the new year or whether it is earned throughout the year. If the business gets particularly busy at a specific time of the year, such as Christmas for retailers, these days should be blackout dates.
How many floating holidays are included in the calendar year?
Employers typically offer a maximum of two floating holidays each year. Some specify that employees hired in the second half of the year will only receive one floating holiday.
Companies should also consider whether unused floating holidays will carry over at the end of the year. These accrual details must be stipulated in the employee handbook under vacation policies.
It’s also important to check state laws and confirm whether employees receive a payout for unused PTO days if they leave the company.
What is the procedure for requesting a floating holiday?
Employees should request their floating holiday in advance, with enough time for the employee’s supervisor to approve the request. The amount of notice needed will depend on the busyness of the department and individual relationships.
Some companies implement a tracking system to stay on top of PTO days. It’s also helpful to use an unlimited PTO policy template when working in a flexible working environment.
Who gets floating holidays?
Some employers only offer floating holidays to full-time staff members. Others extend the perk to independent contractors. Before deciding, you need to consider legal requirements for paid time off for independent contractors.
Global workforce management made easy
Deel offers everything that you need to compliantly hire, pay and manage employees and contractors around the world — including vacation policies and tracking.
