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An HR Glossary for HR Terms

Glossary of Human Resources Management and Employee Benefit Terms

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Floating Holiday

What Is a Floating Holiday?

A floating holiday is a paid day off that each employee can decide when to take. It’s called a floating holiday because every year it “floats” or moves to the date when the employee takes it. A floating holiday is generally given in addition to the typical paid holidays that most employers provide as a benefit.

A growing number of employers choose to provide floating holidays because they help boost employee morale and attract top talent. 

How Is a Floating Holiday Used?

A floating holiday can accommodate diverse needs and interests. Some employees use it to take the day off for a holiday that isn’t part of the company’s paid holidays but is important to them, such as a religious or cultural observance. Others take their floating holiday on a special occasion such as their birthday or a friend’s wedding day. And still others may decide to use their floating holiday for any reason at all, whether it’s to go fishing at the lake or just enjoy a quiet day relaxing at home. 

However, some organizations only allow employees to choose their floating holiday from a company-provided list of cultural, religious, and government holidays and events. Also, some organizations have blackout dates during especially busy times at work when no one is allowed to use their floating holiday.

Do Companies Have to Provide Floating Holidays?

Just as there are no laws requiring U.S. employers to provide paid days off for traditional holidays like Christmas or Labor Day, there are no legal requirements to provide floating holidays. However, some labor unions may negotiate a floating holiday for their members as part of their contract.

What Should a Company’s Floating Holiday Policy Include?

To encourage employees to take advantage of their floating holiday and prevent misunderstandings and abuse, every organization that offers a floating holiday should establish a policy about its use. This policy should be available in the employee handbook. It should include:

  • Whether the floating holiday is available at the beginning of the year or is earned during the year

  • Whether it is available to both full-time and part-time employees

  • How far in advance a floating holiday must be scheduled and approved by the employee’s supervisor

  • How long new employees who are hired during the year must wait to qualify for the floating holiday

  • Any other restrictions on how or when a floating holiday may be used

Can a Floating Holiday Be Carried Over into the Next Year?

There’s no federal law about this, but check your state laws; regulations vary. In most areas, though, each company can decide this matter for itself. Most organizations have a use-it-or-lose-it policy where the floating holiday is lost if it is not used by the end of the calendar year.

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