Let’s face it – everybody loves a day off. But it shouldn’t be a shoe that fits everyone. That’s where floating holidays become a great alternative. If you’ve ever asked, “What is a floating holiday at work?” you’re not alone. Many employees, and likely many managers too, have thought the same thing, wondering if they fully understand how it works.
Think about it as a build-a-holiday. It is your day off; instead of getting a day off only when the holiday falls on a national holiday, you get to choose the holiday. So, whether it’s your birthday, a cultural celebration, or a day when you need to recharge, a floating holiday is flexible time off that fits your life, not the calendar.
In this post, I will break everything down: what floating holidays are, how floating holidays work, and five undeniable perks to floating holidays that you should seriously consider using at a modern workplace.
🔑Key Takeaway:
- Floating holidays offer flexible paid time off.
- They support cultural and religious inclusivity.
- Boosts employee morale and retention.
- Easy and cost-effective to implement.
- Clear policies prevent confusion.
What Is a Floating Holiday at Work?
A floating holiday is an extra paid day off that an employee can take at their discretion. It’s called a floating holiday because it isn’t tied to a specific, fixed date (like Christmas or Independence Day), so the employee can take off when they want.
Some employers offer one or two floating holidays each year, typically in addition to your paid time off (PTO). Employees can use a floating holiday for:
- Personal events (like birthdays or anniversaries)
- Religious holidays or cultural holidays
- Mental health days
- Just because. You need a break!
The point is, floating holidays are nice because of their flexibility. In today’s diverse workforce, flexibility is not just a nice perk but a necessity.
How Do Floating Holidays Work?
Every company has a different way of handling floating holidays, but here is a general overview of how they typically work:
- Allocated Days: Each year, employees are given either one or two floating holidays to use during the calendar year.
- Request Process: Just like other time-off requests, employees will usually need approval from a supervisor before taking the day off.
- Use-It-Or-Lose-It: Some companies enable you to carry over, while others provide a day that must be used within the same vacation year.
The most important aspect of floating holidays is clarity. Companies should clearly state the floating holiday policy within employee handbooks so that there are no misunderstandings.
Why Do Companies Offer Floating Holidays?
Attracting and retaining talent is more important than ever. Floating holidays are one way to provide flexibility in time off and to acknowledge that your employees have unique and diverse needs, journeys, and backgrounds.
Additionally, as we create more inclusive and diverse workplaces, fixed holidays become problematic. For example, not every employee celebrates Christmas. Not every employee takes July 4th off to relax and celebrate Independence Day. Floating holidays allow employees to connect with what is meaningful to them, and do so
5 Perks You Must Know About Floating Holidays
Now that we have provided an answer to the question “What is a floating holiday at work?” let’s take a look at the reasons why it matters. Here are 5 impactful benefits you must know.
1. Flexible Time Off that Values Your Life
One of the greatest benefits of a floating holiday is that it allows you to choose what is most important to you. You may want to take off for Eid, Diwali, or your child’s first day of school. Floating holidays allow you to make those decisions.
It’s a relatively simple, yet impactful way for employers to say: “We trust you.”
Why it matters:
- Supports cultural and religious diversity
- Gives employees more control
- Supports work-life balance
2. Moves the Needle and Employee Satisfaction
Let’s be honest—when people feel seen and respected, they feel happier at work. With floating holidays, your employer demonstrates that they care about you as a person and not just a business resource.
Even one extra day away from work can alleviate a lot of stress and exhaustion from burnout. And that just translates into higher morale, improved productivity, and less turnover.
Why it matters:
- Employees feel more valued
- Reduces mental fatigue
- Employees feel more loyal to the employer
3. Stimulates Inclusiveness and a Sense of Belonging
In the workspace today, inclusion is not optional, and inclusion is a priority. Offering floating holidays provides coverage for your employees, regardless of who they are.
When companies provide employees with an option for time off for personal or cultural reasons, they create a more inclusive and respectful workplace.
Why it matters:
- Acknowledges diversity
- Encourages a more inclusive workplace
- Contributes to everyone feeling like they belong!
4. Simple to implement and customize
One of the best things? Floating holidays are simple for employers to implement. Unlike adding new public holidays (which could be tricky and expensive), floating holidays do not close the entire office.
Simple, scalable, and, outside of being added to most PTO programs, it will take minimal effort.
Why it matters:
- Easy policy change
- Low-cost investment with high value
- Customizable to your company’s needs
5. Provides a Mental Health Break
Sometimes, you just need a break before you burn out. Floating holidays can be used for mental health days, giving your employees the time to not just relax, but decompress and come back rejuvenated.
It is a more proactive approach for supporting the emotional health of your team, not just their performance.
Why it matters:
- Reduces burnout
- Supports mental wellness
- Encourages healthy work habits
Benefits of Offering Floating Holidays
- Flexible/Inclusion Benefit For Diverse Teams
Allows employees to observe the holidays or take time off that hold meaning to them personally, regardless of religion or culture. - Employee Satisfaction and Retention Improvement
Moving the needle on morale by demonstrating appreciation for an employee’s individual needs can improve loyalty, resulting in reduced turnover - Easy, Cost-Effective to Implement
Requires little change to an organization’s existing PTO systems and is typically unlikely to have costs if employees take floating holidays when there isn’t a required closure. - Promotes Work-Life Balance
Employees can take off when they need to for mental/emotional support, thus supporting their wellbeing while simultaneously reducing the risks of burnout. - Enhances Company Culture
Provides evidence that your organization values flexibility and inclusion, supporting your employer branding.
Cons of Offering Floating Holidays
- Requires Clarity on Policy for Clarity to Alleviate Confusion
If there are no clear policies on how and when floating holidays can be used, employees and managers may become confused about the use of floating holidays. - Requires Coordination Among (Scheduled) Employees
Some employees can take floating holidays together without affecting productivity or team efforts; however, some employees have workloads that make this difficult. - Some Employees May Forget It’s There
“Use-it-or-lose-it” policies may mean that floating holidays get unused, lost benefits, and employee frustration. - Positive Inequity in Use
Certain employees definitely carry heavier loads, while other employees can reasonably realize that floating holidays are now practically impossible; this isn’t fair. - Difficult/Manage to Track
Should you track floating holiday distinctly from other PTO, it will differ, and tracking it properly will still need to be in compliance with the employees’ time away from work, for future payroll.
Are Floating Holidays Considered PTO?
Not quite. Floating Holidays are time off with pay, but the distinction is significant.
- Paid Holidays off(PTO ) covers vacation days, sick days, and all other personal time off.
- Generally, floating holidays are time off with pay in addition to PTO, which is considered personal time off or for cultural reasons.
So while you might use PTO for a beach trip, you’d use a floating holiday for something like Lunar New Year or your birthday.
Floating Holidays vs. Paid Holidays
Do Companies Have to Provide Floating Holidays?
Many employees are curious about whether or not companies are legally obligated to provide floating holidays. The short and sweet answer is: No, companies, employers are NOT obligated by law to offer floating holidays.
Floating holidays are a voluntary benefit offered by an employer. Some employers offer floating holidays to help improve employee satisfaction and allow for flexibility in the workplace. Whereas statutory holidays are mandated by government labor laws, floating holidays are discretionary and vary significantly between organizations.
So, if companies are not required to provide floating holidays, why would they do it?
- To attract and retain a diverse population of talent
- To promote cultural and religious inclusivity
- To help improve morale and work-life balance
- To offer additional flexibility above and beyond standard PTO
IMPORTANT NOTE: Many employers may choose to promote the use of floating holidays. If a company does choose to provide floating holidays, terms of use, i.e., the number of days that are offered, how to request approval, if they can expire, etc., should be spelled out in the employee handbook or benefits policy. This will help ease confusion and ensure that everyone understands how to effectively take advantage of this perk.
Floating Holidays: How Many Do Organizations Generally Provide?
There is some variation based on the specific organization, but most organizations offer at least 1 or 2 floating holidays in a year. Some more generous employers may offer even more floating holidays (especially in global organizations).
Here are some examples:
- Small businesses: usually 1 per year
- Mid-sized: commonly 2 per year
- Large or international: possibly 3+, depending on location or diversity policies.
Regardless, the important key is ensuring it is stated in the time-off policy.
Tips for Using Your Floating Holiday Wisely
- Be proactive – Make sure you proactively check in with your team’s calendar and have a plan in place so you won’t be overlapping with another colleague
- Use your time wisely – The floating holiday can be used for what you wish, rest, reflection, or a personal celebration!
- Do not forget it – If your company has a “use it or lose it” policy, put it on your calendar!
Conclusion: Why Floating Holidays are Beneficial for All
What is a floating holiday at work? A floating holiday is more than just a day off, it is a clever way to provide employees with flexibility, value, and work/life balance.
In today’s world of equity, mental health, and flexibility, floating holidays can be the answer to accomplish both employee and employer expectations.
If your company does not already offer floating holidays, consider putting in a suggestion to management. When people feel appreciated, they will go above and beyond, and in some cases, it can simply be making a day flexible that can go a long way!