Floating holiday

What is floating holiday?

Floating holiday

A floating holiday is a workplace policy that allows employees to choose when to take an extra paid day off, providing greater flexibility. Learn how it works and why implementing it in your company can be beneficial.

What is a floating holiday?

A floating holiday is an extra paid day off that employees can take at their convenience. Unlike statutory or public holidays, it is not fixed to a specific date. Employees can select a day that aligns with their personal needs, whether to observe a religious or cultural occasion or to mark a personally significant event.

Floating holidays are commonly offered in the United States, where many companies implement them to promote flexible leave policies and foster an inclusive workplace culture.

Is a floating holiday a paid day off?

Floating holidays are typically paid, but company policies regarding their use vary. Some employers allow unused floating holidays to carry over into the following year or offer a payout for unused days, while others implement a „use it or lose it” policy.

Why implement floating holidays in your company?

Floating holidays can be particularly valuable for culturally diverse organizations. They allow employees to observe holidays that are personally significant to them and adjust their time off to suit individual needs. This flexibility can boost employee satisfaction and loyalty. For example, Clari, a company that has adopted floating holidays, offers flexible days off as part of its work-life balance strategy.

Additionally, floating holidays help international teams manage work schedules across different time zones and holiday calendars.

Key considerations before implementing floating holidays

Proper planning is crucial to ensuring that floating holidays operate seamlessly and do not interfere with business operations.

Clear guidelines and policies

A well-defined floating holiday policy should specify:

Who is eligible for the benefit.
How many floating holidays employees receive.
Any restrictions on when they can be used.
The process for requesting and approving floating holidays.

Employees should have easy access to these guidelines, which should be outlined in company policies and internal documents.

Compliance with labor laws

Floating holidays must comply with applicable labor laws. Before implementation, consider whether the extra day off affects annual leave limits, how unused floating holidays should be compensated, and whether they require tracking in work time records. Consulting with legal experts can help prevent potential risks and inconsistencies.

Managing unused floating holidays

Establish a clear policy on what happens to unused floating holidays. Your decision should align with company benefits policies and legal requirements.

Impact on business operations

To prevent disruptions, implement an absence management strategy. Key considerations include maintaining minimum staffing levels on critical days, approval processes for requests, and ensuring coverage for essential roles. A well-planned approach will help maintain business continuity.

Effective communication and implementation

The success of a floating holiday policy depends on clear communication. Provide informational materials for employees and candidates, and train managers on the policy.

How to track floating holiday usage

As a paid day off, floating holidays must be monitored by HR to avoid scheduling and payroll issues. Using an HR platform such as PeopleForce can simplify the process by enabling:

Creation of flexible leave policies tailored to company needs.
Management of all types of leave in one system.
Automated tracking, calculation, and reporting of leave balances.
Integration with Google Calendar or Microsoft Calendar for easy leave tracking.