What is a Floating Holiday – All You Need to Know

Andrew Buck August 19, 2021

It’s common for businesses to adopt flexible time off policies, to fit the ever-growing diversity in the workplaces of today.

The floating holiday is one concept that embodies the flexibility that workers today crave. Floating holidays give your workers the choice of when they take their days off, and promote a sense of fairness and inclusion in the workplace.

Read on to learn more about floating holidays, including when they are given, how they’re different to regular paid time off, any legal requirements you need to know, and a lot more.

What is a Floating Holiday?

A floating holiday is a day off that is not tied to a specific date. The employee can decide when they wish to take this day off.

A floating holiday is generally provided as paid time off, in addition to public holidays. Employees can take the leave days when it best suits their needs, as the dates are typically different each year. 

Including floating holidays in your time off policy promotes a sense of diversity and inclusion of all your team members from varying backgrounds.

When are Floating Holidays Given?

Let’s take a look at a few situations in which employees may be given a floating holiday.

Public Holidays

Typically, employers offer public holidays as paid time off for their employees as a benefit. If your business requires that some of your employees have to work on public holidays, you can later allow them to take a day off as a floating holiday.

It allows you to make sure that you’re adequately staffed to complete all the work, but also to maintain fairness and allow each of your employees equal time off for public holidays.

Make Up for a Public Holiday

If a public holiday, like the 4th of July, falls on a non-working day like Saturday, your employees don’t want to miss out on what would otherwise have been a paid day off. 

With a floating holiday, you can allow your team the following Monday off to make up for the lost time off on the actual public holiday date.

Public Holidays for Remote Teams

If you have a remote team spread across different countries, you can use floating holidays to make sure that all employees get equal time off. 

For example, Labor Day is a public holiday in the United States, but not in the UK. If you provide the day off to your U.S. employees, it’s not fair to your UK staff if they have to work that day. 

You could use the floating holiday to allow your UK staff to also take the day off. They could choose to take the day off on the same day as US colleagues, or choose to take the floating holiday on a separate day.

Religious Holidays

You can also use floating holidays to accommodate holidays for employees with different religious backgrounds in your team. 

If you have employees who don’t celebrate Christmas, you could still give them the day off.

Or perhaps you have Hindu employees who celebrate holidays like Dashera or Diwali, which are not public holidays in the U.S.. With a floating holiday, your Hindu team members could take those days off to celebrate with their families and communities.

As we mentioned before, a floating holiday could help you promote a sense of fairness and inclusion for people from all backgrounds in your team, which ultimately boosts team morale and leads to a more harmonious and collaborative work environment.

Overtime Compensation

Sometimes, things need to get done in a crunch. And maybe some of your team members step up to the plate, work overtime, and help you hit a critical deadline.

You could show your appreciation for them going the extra mile by providing them with a floating holiday that they can take when it best suits their needs.

Birthdays

It could be a nice gesture to provide a floating holiday to your employees for their birthdays. It would allow them the flexibility to take the day off when it actually makes the most sense for them. 

For example, if your team member’s birthday is on a Tuesday, but they’re actually celebrating with their friends on the weekend, it might be better if they could take Friday or the following Monday off.

Earned Benefit

Finally, a floating holiday could be offered as an incentive with time worked at the company. For example, your policy could be that for each year an employee spends with the company, they get an additional floating holiday added to their time off days. 

What is the Difference Between Floating Holidays and Paid Time Off?

Floating holidays are essentially a part of your paid time off benefits for your employees. But there are a couple of key differences between floating holidays and regular paid time off days.

Depending on your paid time off policy, your employees might accrue a certain number of vacation hours or days. Floating holidays, on the other hand, are awarded at the beginning of the year.

Another key difference is that there is typically no carry-over of floating holidays into the next year. If an employee gets three floating holidays per year, but they only use two, the cycle resets at the beginning of the following year and they’re back to three.

For regular paid time off, it is often the case that unused paid vacation days carry over to the next calendar year.

What is Paid Time Off? Read more about paid leave in this complete guide.

Are You Required by Law to Provide Floating Holidays?

In the United States, there are no laws that regulate floating holidays. Whether you provide floating holidays, and how many days, would depend on your company’s time off policy.

Benefits of Offering Floating Holidays to Your Staff

Even though it is not required by law, there are a few key benefits to providing floating holidays as a part of your benefits package. 

As we’ve already touched on previously, floating holidays allow you to do the following.

Ultimately, it’s a small gesture on your part that can go a long way to demonstrate that you value employee wellbeing and that you celebrate diversity in your workforce. 

How to Handle Floating Holidays in Your Leave Policy?

When including a leave type in your time off policy, there are usually a couple of key things to consider.

With those objectives in mind, here are some key details to include in your floating holiday policy.

When are floating holidays given – Review the different examples above for when floating holidays are awarded and decide which ones make the most sense for your business and team.

Who is eligible – Are there eligibility criteria for floating holidays? Is it only reserved for full-time employees? Do they have to spend a certain amount of time with the company before they qualify?

How to request floating holidays – State what process employees must follow when requesting a floating holiday. How should they submit their request? What information do they need to include? What criteria are used to evaluate and approve/deny the request?

If there is carryover – Typically, floating holidays do not carry over to the next year. But if you want to be extra generous with your time off policy to attract top talent, then you can include it in your policy.

How much notice – Do employees need to request floating holidays a certain number of days in advance? If a sudden absence can derail your workflow, then it might be a good idea to stipulate that you need adequate notice, so you can find replacements before you approve the leave.

How to Track Floating Holidays?

Tracking and managing the employee leave calendar is a critical HR task. It helps make sure that you don’t end up short-staffed and the workload is balanced throughout the year. 

It also allows you to avoid confusion about staff availability and prevent abuse of your time off policy. 

The best way to track your team’s absence calendar is to use a leave management software like Flamingo

It will allow you to track remaining vacation days for each employee, and also differentiate between how many of those days are paid vacation days, unpaid time off, floating holidays, and more. 

A leave tracking software also lets you easily view the entire team’s absence calendar for the year so you can make sure that you don’t approve too many leave requests during the same period and prevent a situation where your workflow is disrupted and you miss any deadlines.

Learn more about Flamingo, and how our tools fit seamlessly with your workflow, to make requesting, approving and managing leave a breeze – for both employees and managers.

Learn more

Final Thoughts on Floating Holidays

A floating holiday is a versatile time off policy tool that allows you to promote employee wellbeing, a sense of fairness, and it demonstrates that you value and welcome a diverse and inclusive workforce.

A generous time off benefits package that includes floating holidays can also help you attract top talent. Flexible hours and vacation time rank only behind better healthcare when it comes to the most desirable employee benefits.

Be sure to clarify the policy details to your team as explained above, and to use a leave management software to track and manage your team’s floating holiday calendar. 

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