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 it “floats” or moves to the date when the employee takes it every year.

Floating holidays are generally given in addition to the typical paid holidays that most employers provide as a benefit.

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Floating Holidays vs. Paid Time Off (PTO)

Both floating holidays and PTO are forms of paid leave; however, they’re used in different circumstances. As mentioned above, employees use floating holidays at their discretion to celebrate special occasions (such as birthdays, anniversaries, cultural events, etc.). However, they don’t roll over year to year.

PTO is also compensated time off of work, and employees can use it as they see fit. Time is usually measured in hours and covers absences like sick days, vacations, and personal time. And unlike floating holidays, unused PTO hours can usually be carried over to the next year.

Floating Holidays vs. Paid Holidays

Floating holidays are also different from paid holidays. The biggest difference is that employees can take a floating holiday on any day whereas a paid holiday happens on a specific date.

Paid holidays are national, state, or religious holidays that employers can choose to give as compensated days off to employees. Federal law doesn’t require employers to give employees paid holidays. The Fair Labor Standards Act (FLSA) only mandates requirements around minimum wage and overtime pay.

Some of the most common paid holidays include:

Other holidays—including Martin Luther King Jr. Day, Presidents’ Day, and Christmas Eve—may be included, but it’s ultimately up to employers.

Floating holidays aren't recognized as national holidays and can be taken at the employee’s discretion. For example, Muslim employees could take a floating holiday to celebrate religious feast days like Eid al-Fitr.

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 to attend a wedding. And others may decide to use their floating holiday for any reason, whether to go fishing at the lake or enjoy a quiet day relaxing at home.

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

Pros and Cons of Offering Floating Holidays

While offering floating holidays isn't required by the federal government, there are benefits to including them, including:

However, there are also some disadvantages to offering floating holidays:

Do Companies Have to Provide Floating Holidays?

Just as there are no laws requiring employers to provide paid days off for 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 Floating Holiday Policy Include?

To encourage employees to take advantage of their floating holidays 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 the following rules and clarifications:

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

There are no federal laws about this, but check your state laws; regulations may vary. In most areas, 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’s not used by the end of the calendar year.

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