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How To Manage Floating Holidays

How To Manage Floating Holidays

How To Manage Floating Holidays

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Every employment contract has its perks and each workplace offers its own selection of benefits. However, one of the most popular and common perks included in employment contracts and discussed in HR fractions and employee circles around the globe are floating holidays.

There are two types of floating holidays and understanding the differences between them can often be confusing. However, no matter your industry or employment role, it’s important to understand these terms fully so that you’re fully aware of your rights as an employee, employer, or HR executive.

In this article, we’re going to define a floating holiday, describe how it tends to operate in a work setting, compare it to other forms of paid time off, and list its benefits so that you can be fully informed on everything you need to know about this type of holiday.

What Are Floating Holidays?

As mentioned above, there are two types of floating holidays. The term can describe a public holiday that doesn't land on a specific date each year, such as Martin Luther King Day or International Women’s Day, or it can be used to describe a paid day off from work that employees can substitute for a public holiday.

In particular, floating holidays are important to individuals who may not celebrate federally recognized holidays or religious traditions that are the norm in their country or organization. Having floating holidays means that all employees have access to equal paid days off or holiday time no matter their orientation. Additionally, it means that they can utilize these vacation days at their own discretion.

While some individuals take their floating holidays on days of significance, most employees who offer them allow their employees to take them whenever they may like. This offers individuals a fantastic degree of flexibility and demonstrates a clear degree of understanding from a person’s employer and organization.

Taking time off - Floating holidays

How Does a Floating Holiday Work?

A floating holiday is a paid day that an employee can use in addition to their vacation time, sick leave, or other PTO during the calendar year. Generally, an employer offers a floating holiday as a substitute for an unobserved public holiday or religious holidays and in turn, lets the employee choose what day they would like to take.

On the surface, floating holidays look just like regular paid days off, however, there are some important differences between them. Knowing and understanding these differences is key to making the best use of your floating holidays.

A floating holiday is like a hybrid between an actual holiday and a paid day off. Every company has a different floating holiday policy and it’s important that this policy is transparent and clear to all employees so that they are aware of their accessible vacation time and the differences between their PTO policy and the regular vacation policies.

To ensure that employees understand your various policies and take advantage of them, we advise including them in your company handbook and making them available on your chosen HR platform.

In your policy, it’s important to mention clear up the following;

  • Whether the floating holiday is available at the beginning of a new year or at the end of the year
  • Whether employees will receive a payout for unused floating holidays
  • Whether floating holidays receive accrual under the company policy
  • What kind of employees are entitled to floating holidays
  • Whether floating holidays can be carried into the following year
  • Any other restrictions on when/how floating holidays can be used

How Many Floating Holidays Are There?

The policy for floating holidays is not set in stone by law. The number of floating holidays offered by a company is left entirely in the hands of their employer and human resources department.

Many companies offer two floating holidays per year to employees once they begin their contract. Meanwhile, other workplaces insist that employees must take their floating holidays by the end of the year or refuse to offer holiday pay for unused floating holidays.

The policy truly varies from case to case and there are no laws that regulate company actions or standards in regard to floating holidays.

Employee holiday calendar - floating holidays

What Are the Benefits of a Floating Holiday?

If a company decides to offer floating holidays to their employees it can be advantageous for both them and their workforce. To help you understand why we’ve compiled some of our top benefits to floating holidays.

It Enables Your Business To Run Year-Round

Some businesses automatically give all employees time off during certain holidays, however, arranging for a company blackout like this might not be the most beneficial of decisions for you or for your business model. It might mean that you are unable to operate, bring in revenue during a very busy time of year.

However, offering floating holidays enables some employees to take time off while also allowing space for other employees to remain working, thereby keeping your business operational.

It Improves Company Work-Life Balance

Everyone loves having paid days off, however, not everyone’s life fits or special occasions look the same. A system of floating holidays acknowledges this. Instead of forcing employees to take the same days off across the company, it gives them the freedom to manage their holidays in a flexible manner, thereby enabling them to take paid holidays on days that suit their personal commitments and enhancing their work-life balance.

It Builds an Inclusive Work Culture

Creating and allowing for a diverse company culture should be among the most important priorities for all organizations, no matter their size or industry. It’s important that all workplaces reflect the diverse world in which we live and that isn’t just in reference to hiring procedure, but it also means allowing for and celebrating the cultural differences and preferences among all employees.

Adding a floating holiday to your company’s benefits package is a wonderful and proactive way to support your company’s initiative to become more diverse. It also reflects the fact that most cultural and religious holidays are not recognized by standard company procedure and gives individuals the space to observe the ones that mean something to them.

It Enhances Employee Satisfaction

Employees who feel fulfilled and recognized by their company and work policy are better employees. It’s a simple fact.

A floating holiday is an inexpensive yet mindful benefit that could make a huge difference to your employee's overall satisfaction and motivation levels. Additionally, it can be hugely beneficial to the trajectory of your company because it will likely be perceived as attractive to top talent and enhance your retention rates. It’s a win-win!


So, that concludes our summary and advice on all things related to floating holidays. Incorporating them into your company policy could be a fantastic way to help you retain top talent, enhance the work-life balance of your workforce across the board and just generally, provide for a more realistic and diverse company culture.

If you’re thinking of implementing floating holidays into your company protocol, keep this article close at hand so that you can reference it regularly. Good luck!


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