HR Mavericks

Eddy’s HR Mavericks

Encyclopedia

Floating Holidays
Is a floating holiday an actual holiday? What are the benefits to providing them, and should you offer a floating holiday policy? Read on to learn more.

What Is a Floating Holiday?

Floating holidays are paid or unpaid days off from work that employees can use in lieu of a different holiday for personal or religious reasons. Some organizations—typically those consistently open on holidays—forgo the traditional “time off for these 11 holidays” and allow employees the ability to take off 11 days during the year as holidays in accordance with their work schedule and desires.

Why Should Organizations Consider Offering Floating Holidays?

Let’s evaluate why offering this policy could be beneficial to your organization.
  • Promotes diversity and inclusion. During the interview process, potential candidates are evaluating your organization, just as you are assessing them. Floating holidays show that you encourage diversity in your organization and do not hold everyone to the same rigid holiday schedule that may not fit them or their beliefs.
  • Allows flexibility. Since some of your employees may not celebrate Christmas, they may have no issues working that day, while others prefer to spend that day with their families. A floating holiday policy allows your organization to provide this flexibility to your employees for every holiday, hopefully keeping more people happy.
  • Encourages work-life balance. Floating holidays support your employees in having a thriving life outside of work. If their culture spends three days in celebration of a specific holiday, the floating holiday policy allows them to do that. There are few things more powerful to a company culture than supporting employees' work-life balance.
  • Retention. When work-life balance is supported, people tend to stay. When an organization truly sees the needs of their employees and does their best to meet them, employees stick around.

How to Develop a Floating Holiday Policy

Let’s take a look at the steps to establishing a floating holiday policy.

Step 1: Schedule Other Holidays First

If your organization has decided to establish a floating holiday policy in tandem with regularly scheduled holidays, be sure your other holidays are scheduled first. If your company closes on the 4th of July, Thanksgiving, and Christmas every year, be sure that is clearly defined before you do anything else. While employees may not celebrate those holidays, if your organization is choosing to close, they need to be clearly defined as a holiday—paid or unpaid in accordance with your policy—and communicated to employees.

Step 2: Establish Floating Holiday Amounts

Once you have your other holidays scheduled, if any, it’s time to establish how many floating holidays you want to give employees. If your organization is offering them together with other scheduled holidays, perhaps you keep it low and only allow three to five additional floating holidays per year. If your company is regularly open on holidays, perhaps you go a bit more generous and provide employees with a standard 11 floating holidays to use per year. Pick a number that your organization is comfortable paying employees, and stick with it year over year. The number of holidays typically stays consistent, and you’ll want to do the same with your policy.

Step 3: Establish an Approval Process

While you’re providing your employees a bit of wiggle room to take floating holidays, be specific on the approval process. Clearly state that a floating holiday request does not guarantee approval, and have a clearly defined approval process that they need to follow. Perhaps they submit their approval to their direct manager at least two months prior in order for the request to be approved, or maybe they need approval at a director level for this type of time off. Whichever direction your organization goes, be sure you have a clearly defined process so you’re able to track this time off consistently.

Step 4: Administer to Employees

Lastly, once you’ve established the policy, communicate and distribute it to your employees. You might announce it at the next company meeting to drum up some excitement. If your organization utilizes email communication for these types of things, be sure to attach the policy for employees to review. Allow a learning curve, as some employees might take some time to understand the policy, and be available to answer questions until they understand the new policy.

Common Challenges Associated With Floating Holidays

Implementing any new policy has its challenges that you should be prepared to handle to the best of your abilities.

Navigating Busy Seasons

There is an inherent busy season in every organization. For HR professionals, most know this as Quarter 4, but your employees may have a busy season in the first few months of the year. Perhaps you are busy at the end of the year and then again in the middle of the year, or you have peak weeks for busy seasons then things level off. If you’re going to implement a floating holidays policy, ensure you’re not setting yourself up for failure during those busy seasons. Consider making some days “black out dates” so employees at your organization cannot take time off at peak times. If you navigate this well, it will avoid a lack of support for your organization when extra support is needed.

Inconsistency

Without the proper checks and balances in place, you could have a lack of consistent workforce due to overuse of the floating holidays. When you have a regular holiday schedule, it’s easy to know things like “employees will be off this day” or “the company is closed in observance of this holiday,” but with floating holidays it is harder to predict. Be sure you’ve established an effective way for employees to request time off and a rock-solid approval process to go along with it. Consider utilizing team meetings or company announcements to echo this policy and continually explain to employees so there is no confusion.

Differentiating Between PTO and Floating Holidays

It can be confusing for employees to understand when to use paid time off (PTO) and when to use floating holidays, so be sure it’s clear for your organization. If you prefer employees use floating holidays for holidays and use their PTO for other types of time off, specify this in your policy. If your organization is more flexible and doesn't regulate the difference between PTO and floating holidays, you may want to re-evaluate the need for having floating holidays at all. If you pay for PTO but not for floating holidays, make sure your employees understand the difference. The point is to not make things more confusing for your employees, but rather offer a benefit that can improve the work-life balance of all your employees. If your organization moves forward with a floating holidays policy, be sure you are clear on the differences.
Topics
Shalie Reich

Shalie Reich

Shalie has over 4 years of experience working in a variety of HR positions and organizations including: working as an HR department "of one", working with a start-up based in Europe, to working in a fully established robust USA based HR department. Shalie has experience in multiple states and countries with all aspects of the HR spectrum. She has a passion to share her knowledge and experience to benefit the HR profession!
View author page
Frequently asked questions
Other Related Terms
Benefits Administration
Carryover (PTO)
Commuter Benefits
Company Car
Competitive Pay
Dental Insurance Benefit
Disability Insurance
Earned Wage Access (EWA)
Employee Benefits
Employee Incentives
Employee Relocation
Employee Rewards
Employee Stock Ownership Plan (ESOP)
Employee Swag
Employee/Employer Flexibility
Equity Compensation
Flexible Spending Account (FSA)
Golden Handcuffs
Group Incentive Plan
Health Reimbursement Account (HRA)
Health Savings Account (HSA)
Life Insurance Policy Benefit
Lump-Sum PTO Policy
Open Enrollment
PTO Accrual
PTO Accrual Cap
PTO Payout
Paid Holidays
Paid Vacation
Pension
Restricted Stock Units (RSU)
Retirement Benefits
Roth 401k
Section 125 Cafeteria Plan
Special Enrollment Periods
Spousal Surcharge
Traditional 401k
Tuition Reimbursement
Unlimited PTO
Vesting
Vision Insurance Benefits
Workers' Compensation
Eddy's HR Newsletter
Sign up for our email newsletter for helpful HR advice and ideas.
HR Mavericks
Simple and accurate payroll from Eddy
Pay your U.S.-based employees on time, every time.