What Is A Floating Holiday? What Are The Rules Around Floating Holidays?

A floating holiday is a paid day off granted by employers to their employees at any time during the year. Keep reading to get the details about a floating holiday and the rules around floating holidays, even the most business-centric definition.

A floating holiday is a flexible holiday, unlike traditional fixed holidays observed on specific dates, specifically for the employees for personal reasons within particular guidelines set by the company.

Numerous businesses grant floating holidays, as an employee benefits package, an additional perk to take a personal day off at their discretion. It comes with much positivity to encourage flexibility, boosts the company’s morale, and promotes a healthy work-life balance and your organization’s initiatives.

A floating holiday idea and a robust benefits package attract and retain top talent as the best variables one may consider. Many cultural and religious events come as something other than national holidays; a floating holiday can make people celebrate their special days.

A floating holiday is a small token of recognition and makes the team feel valued, which may help to retain diverse employees. In this article, you will learn more about what counts as a floating holiday and whether its implementation would be the right option for your business.

Table of Contents

What are the floating holidays?

Floating holidays usually accommodate diverse needs and interests, so employees use it as a day off apart from the company’s paid holidays. This flexible holiday is the best option for cultural and religious observance, or one may utilize it on special occasions, such as birthdays or weddings, or even a planned holiday with loved ones.

There are two meanings of the phrase “floating holiday,” which could be:

  • A public holiday that always comes on a different date every year. For instance, Thanksgiving falls on a different date yearly, as it comes on the fourth Thursday in November.
  • A paid day off from work could be a substitute for any public holiday. This is a pure form of paid time off, and employees can choose it according to their preferences.

One must consider every variable before making any decision because there are numerous ways to offer floating holidays to their employees. It all depends on how you proceed, and the outcome depends on your decision, as it could be gratifying or even backfire for the business.

Floating holidays are among employees’ favorite perks; they use them to work around non-flexible schedules. Employees usually use floating holidays to attend cultural or religious events, which still need to be recognized as holidays.

Although there is no compulsion on employers to provide such floating holidays type of benefits, one must consider them. It allows employees to take time off those dates which matter most to them, ensuring diversity and inclusion.

Employees feel indebted and try to bring their whole selves to work. They feel a sense of belonging, enhancing creativity, engagement, and productivity. However, employers must design days when employees can avail of their floating days per year.

Floating holidays come with the understanding that employees can have different religious beliefs, belong to various traditions, and still have not disadvantaged each other concerning co-workers. Some employees take floating days off on the days of significance, employers typically allow these days any time of the year, but they expect a notice beforehand.

Benefits of offering floating holidays

In some companies, floating holidays allow employees to choose holidays from a list of cultural, religious, federal holidays, or organizational events. A floating holiday ensures employees’ flexibility, improves team morale, and supports diversity and inclusion at your business.

We believe that floating holidays are advantageous for businesses and employees; here is a deep dig into some key benefits:

  • Floating holidays can keep the business running during holidays
  • A floating holiday benefit provides flexibility and work-life balance to your employees
  • Floating holidays can help to reduce the burden
  • Floating holidays help build an inclusive work culture
  • An employment package with floating holidays can attract and retain top talent
  • Offering floating holidays mean you embrace a diversity of various cultures and religions
  • Floating holidays ensure that businesses will be open during public holidays
  • Floating holidays allow more PTO (Paid Work Off) for leisure time, sick leaves, and personal needs
  • Compensation for the times when employees must work on a standard holiday
  • Ensure your business operates smoothly
  • Cut down the administrative burden

Floating holidays can keep the business running during holidays

Floating holidays can be helpful for seasonal businesses to stay profitable. Some companies offer time off during specific holidays, whether it may coincide with their busiest seasons.

The floating holiday policy is beneficial for the business and its employees. Even at peak season, they always retain revenue while offering floating holidays, as some people take time off while others work and keep the business open.


It is an excellent policy for those who never celebrate Christmas or travel anywhere for the new year and Christmas holidays, as they can choose their holiday time easily. Moreover, the business must set floating holiday restrictions on how many employees can take off on the same day.

A floating holiday benefit provides flexibility and work-life balance to your employees

Offering floating holidays may enhance employees’ work-life balance, increasing productivity and reducing burnout. Allowing employees to choose their days off demonstrates respect for their personal commitments outside of work.

Everybody’s life can not fit into the same time off schedule; instead of forcing employees to take off when they are working, a floating holiday could be a fantastic idea for them, ensuring flexibility.

Such behavior of care and flexibility will make the employees plan their appointments and other essential tasks according to their schedule convenience. Nonetheless, some employees use their floating holidays in relevance with other vacations to maximize the paid work off.

This floating holiday option can be best for working parents who want to spend time with their kids while staying home.

Floating holidays can reduce the burden

Choosing floating holidays in your organization is about PTO (Paid Time Off) policy, which could be challenging in various ways. Businesses usually devise an inclusive holiday schedule to accommodate every employee, but it can be taxing.

In addition, floating holidays may minimize scheduling issues. Whereas the business can choose primary public holidays in their standard PTO policy, which allows your employees to select specific, meaningful holidays which suit them

Floating holidays help build an inclusive work culture

What a privilege to create an inclusive and diverse workplace for a good reason making it a top priority. An inclusive and diverse environment may help improve employee performance and overall satisfaction.

Employee benefits plans with floating holidays will support all the primary initiatives of each kind of person. There could be several religious and cultural celebrations that the federal government never recognizes as paid holidays. The floating holidays can substitute, and the employees can observe their essential festivals.

This wise time-of policy with floating holidays is a great way to be more inclusive, as any employee can celebrate a momentous event that is not part of the mainstream culture.

An employment package with floating holidays can attract and retain top talent

Being an inexpensive and desirable job perk could attract potential job seekers. As an employer, if you are willing to be flexible, it will help your business to promote a positive work/life balance while attracting top talent and retaining current employees.

It is always a great idea to include floating holidays as a benefit when posting job descriptions, and you can mention it during the interview process. As it is a massive perk for prospective employees, so must be mentioned alongside health insurance, retirement plans, and benefits information.

A flexible floating holiday can make people from various cultures and religions feel valued and accepted, as it allows them to observe cultural and religious events not part of the business calendar, fostering a sense of belonging within the team. Moreover, it may encourage employees to take time off according to their needs, enhancing workplace mental health.

Offering floating holidays means you embrace a diversity of various cultures and religions.

A flexible floating holiday may ensure people from various cultures and religions feel valued and accepted. One may feel elevated as a part of the team as it may allow them to observe some cultural and religious events which are not part of the business calendar.

Most businesses already celebrate religious and civic holidays; however, some employees need a day off for other vital occasions related to their faith or culture.

Floating holidays ensure that businesses will be open even during public holidays

Some employees do not celebrate mega events like Christmas and Thanksgiving due to their personal beliefs. Additionally, they feel uncomfortable traveling during peak season or any holiday season.

The employees prefer to work during the time whereas the remaining staff is off, which benefits both the employer and employee. Such holiday benefits may allow your business to stay open during public holidays while allowing employees to choose their days off.

For instance, if the company offers a week off for all the employees during Christmas, some will prefer to work that week and can take a week’s offer later.

Floating holidays allow more PTO (Paid Time Off) for leisure time, sick days, or personal needs

Sometimes, employees have personal needs to deal with their family matters, and they need to take the day off without advance notice. Instead of taking a vacation day off, one may use a floating day when necessary.

Employees can also extend the existing vacation time and take extended leave after regularly scheduled holidays.

Compensation for the times when employees must work on a standard holiday

If the company works on a strict deadline or has a rigid schedule that does not allow the employees to take the day off. At certain companies, employees must work on holidays; therefore, floating holidays may enable them to take a day off for another chosen day.

Ensure your business operates smoothly

It is common for people to take their vacation during Christmas and Thanksgiving as these holidays are peak selling seasons in numerous countries that produce the highest sales.

Employers can even experience revenue losses, but they can offer floating holidays for employees who are interested in earning and can work that time. Additionally, they can choose these holidays to offset their date.

Developing a floating holiday schedule could be a win-win situation for employers and employees, who are happy and get money.

Cut down the administrative burden

Picking an inclusive holiday schedule for each employee could be daunting. Nonetheless, floating holidays are the perfect solution to avoid scheduling challenges. Employers can choose which national public to include in the standard PTO policy, and employees can choose which holiday works suit them.

How to develop a floating holiday policy?

Creating a floating holiday policy is essential to encourage employees to use them. Setting clear expectations is critical to a successful floating holiday policy.

Employees should know every detail of the policy before your implementation; therefore, communicate your decision regarding floating holidays in the employee handbook and Paid Time Off policy.

Make sure to define what you mean by floating holidays and all related things to your employees to understand the differences between floating holidays, paid vacations, and mandatory holidays.

Clearly outline floating policy guidelines that will encourage employees to reap the advantages of the time off. The business must hold a Question/Answer session about the policy to answer all concerned questions of employees.

Workers should have feelings of being empowered while taking a day off. As if the business failed to set the right expectations, employees are afraid of taking a day off and even need to remember to use the floating holidays off.

Floating holiday examples

Creating an accurate floating holiday policy guiding employees about dos and don’ts is always great. We will provide an example of how a floating policy should look like.

All full-time regular employees may receive two floating holidays annually in addition to the company’s paid holidays. Employees can utilize these floating holidays based on their preferences but must choose days when the company is open.

One may use floating holidays for all current employees at the beginning of each calendar year. If the company hires any employee before the first half of the calendar year, it will receive two floating holidays, and the hired employee in the second half will receive one floating holiday.

Employees may request and specify certain days when they need floating days off, as requests should be scheduled and approved in advance by the higher authorities. Be careful about the policy and get all the details from Human Resources for accurate information about the floating holidays.

What are the rules around floating holidays?

Every team has different needs, so make a floating holiday policy that may accommodate them all together and must be unique for their business. While designing a successful floating holiday policy, we will guide you with some standard rules to remember:

  • When employees can take floating holidays
  • Schedule the paid holidays
  • Select several floating holidays
  • Set particular parameters for floating holidays
  • Create and distribute a time-off policy
  • Set up other pay codes

When employees can take floating holidays

One must consider designating certain days when employees can and can not take their floating days off. If the company remains open, anyone may decide whether to use the holidays for specific occasions, such as cultural or religious events, birthdays, or state and federal holidays.

If the business follows any tight schedule, and deadlines must be met on specific days each week, or any particular crunch time, then it is better to keep those days as non-float days in your policy.

On the other hand, if the business has some relaxing rules, they may allow employees to use any days of their choice as floating holidays without certain restrictions.

Schedule the paid holidays

Determine the days off when the office will be closed, and everyone will take off.

Select several floating holidays

Determine the number of floating holidays a company may offer while keeping in mind these are the paid days off when the office is open.

Set particular parameters for floating holidays

Determine certain days that one may use as floating holidays, and they may roll over the following year.

Create and distribute the time-off policy

Create Paid Time Off memo to define holiday time, vacation time, floating holiday time, and sick leave time. Such explanatory notes will help the employees to request different paid offs types.

We suggest that businesses add the policy to the employee handbook and give the resources to all employees.

Set up other pay codes

If a floating holiday may have full or partial pay, define them clearly.

How many floating holidays do employees receive per year?

Most companies offer two floating holidays yearly to new employees. For instance, usually, companies specify that the employees they hired during the first half of the calendar will receive two holidays, and the employees engaged in the second half will receive one.

The procedure for requesting a floating holiday

The company must also decide how far in advance employees can ask for their floating holiday. If there is any manager approval, mention that too. Apply some tracking system for the floating holidays and paid leaves.

What’s important to keep in mind while offering floating holidays?

Usually, floating holidays have positive aspects, but still, they may disturb your business if you will not define them thoroughly. If the date of the day off is not entirely determined about days out, then you may not be able to plan employees’ absences.

Prepare for short notice periods

Be prepared if the key employees want a day off within a week, and no policy can limit or stop them; you are in trouble then. Your floating day policy must clearly state the terms and conditions to avoid such issues.

Prepare for busy periods

If your company’s time is most dynamic, you may limit how many floating holidays you request. Some exceptions include limiting the discouraging of last-minute requests in a particular period.

Floating holiday vs PTO

Floating holidays and PTO look the same as they allow employees to take personal time off. These holidays are an amalgam of public holidays and vacations because employees usually use them to celebrate events, individual or family emergencies.

Alternatively, some employers offer unlimited PTO, which means any person can be absent from work, and there is a maximum of two floating holidays per year. Traditional PTO comes with an option of monthly or quarterly for new employees. Whereas the number of holidays may increase for the employees who stay longer with the company.

The floating day usually starts at the beginning of the year, expires at the end of the year, and does not accumulate over time. People need to use more than one floating holiday in the recent year to claim that in the next year.

The most significant difference between the floating holiday and PTO is motive, and one can take one. Floating holidays are usually employees used to celebrate special days, festivals, and so on.

PTO (paid time off) is about returning from work, relaxing, and recharging. One may take a floating holiday from the first-day company. Other types of leaves, which only benefit from paid time off after spending a certain amount of time or if you work full-time.

The PTO policy of the company should outline the difference between sick days, personal days, and other floating holidays.

When a floating holiday is not tied to a specific event, one must pay it out upon termination per applicable state law and PTO policy. As only some states require you to pay out PTO, staying current with the state laws is imperative.

Floating holidays 2023

The most commonly used holiday model is the company model, with set numbers of days aligned with federal holidays in the United States. Other hybrid models and the floating holiday model span massive schedules of businesses and fields.

Set company

Companies that follow the set company holiday model provide a fixed number of holidays where every individual gets days off, and they can choose whether to celebrate or stick to that holiday.

The United States typically has the following federal holidays:

  • New Year: January 1
  • Martin Luther King Jr. Day: Third Monday of January
  • President’s Day: Third Monday of February
  • Memorial Day: Last Monday in May
  • Juneteenth: June 19
  • Independence Day: July 4
  • Labor Day: first Monday in September
  • Indigenous People’s Day: second Monday in October
  • Veterans Day: November 11
  • Thanksgiving Day: fourth Thursday in November
  • Christmas Day: December 25

If the employers choose federal legal holidays, it would be 11 paid holidays per year.


As depicted by its name, a hybrid method mixes both floating and standard holiday methods. With this hybrid method, employees usually receive a set holiday list. If anyone does not adhere to religious holidays like Christmas and alternates the time around.

Some workplaces may set up a hybrid schedule where one may receive a set number of holidays and have two or three days to attain.

Floating holiday

The floating holiday model is when workers receive a few flexible, paid days off they want. An incentive for the companies to boost their morale and is excellent for accommodating the fundamental needs of employees who do not celebrate specific holidays.

Any company may subscribe to a typical schedule only for some employees. Offering floating holidays allows employees to take off the holidays they want to celebrate.

Frequently asked questions (FAQs)

Do employers have to offer floating holidays?

No law can make employers offer floating holidays; however, many companies provide them to show employees that they value them. Some employers even offer unlimited floating holidays as a complete vacation policy.

Do employers have to pay for unused floating holidays?

No law makes employers pay for unused floating holidays, even these days do not roll over. However, how you use your floating holidays will depend on your company policy. Some businesses will pay for unused floating holidays while others do not.

Can employees carry over the floating holiday into the next year?

There are no specific federal laws about carrying out the floating holidays to the following year. Still, one may check their state laws, where regulations may vary, and decide accordingly.

Typically, floating holidays come up with a use-it or lose-it policy as if the holiday is lost in one year; nobody can use it in the next year.

What is the difference between a vacation and a floating holiday?

Employees start with a certain number of vacation days and earn more over time to take any leave for absence or some extended vacation. Alternatively, floating holidays are part of the employee’s benefits package as they start to work in any company, and employees can not accumulate these days like a vacation.

Are there any disadvantages to implementing a floating holiday policy?

The most common disadvantage of implementing a floating holiday could be scheduling issues. When multiple employees request floating holidays at the same time, there could be a disturbance in scheduling.

Employers can avoid scheduling mishaps by establishing proper floating day off policy and stagger the day off requests to accommodate the company’s schedule.


What is a floating holiday, a perk by employers, besides traditional vacation days and sick leaves? Employers can give their employees an essential benefit for their well-being and life outside work.

The floating holiday is a great idea to consider if it makes sense to your team as it provides flexibility and honor for the employees when they are in need; in fact, it is a robust investment in belonging at work.

Adding floating holidays to the vacation policy of your business can have multiple benefits, including finding the best talent and employee retention, promoting inclusion with work/life balance, and a lot more.

Workers hesitate to take a day off because they feel they may be fired or have an undedicated impact. Knowing the rules around floating holidays may encourage them to take their due time off and create a happier and refreshed workforce.

The other name of the floating holidays is flexible holidays, so the employer must decide earlier whether the offer would fit their business. Implementing floating holidays can enhance work/life balance and boost overall productivity within your workforce.

After knowing what counts as a floating holiday, keep track of employees available for scheduling and payroll purposes. Make the approval process meaningful, so communicate your expectations. A good policy is essential for any business as it keeps employees happy and business on track.

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