Floating holidays in the workplace: a quick guide

In today’s dynamic and diverse work environments, flexibility is no longer a perk – it’s a strategic advantage. One increasingly popular way to introduce more flexibility into time-off policies is through floating holidays. These optional days off allow employees to choose when they take time away from work, supporting inclusivity and individual needs.

As organizations continue evolving their benefits to attract and retain top talent, floating holidays offer a low-cost, high-impact opportunity to modernize your PTO approach. In this article, we’ll cover the essentials: what are floating holidays, how do floating holidays work, and practical steps for introducing them into your organization’s time-off framework.

What are floating holidays?

A floating holiday refers to a paid day off that employees can choose to take on a date that holds personal significance to them – rather than being tied to standard public or company-wide holidays. It’s a flexible alternative to fixed days off, allowing team members to observe cultural, religious, or personal occasions that matter most to them. 

Unlike federally observed holidays, floating holidays are not assigned by the employer. Instead, they “float,” giving employees the freedom to pick dates that are personally or culturally significant.

So, what is floating holidays in practice? Think of them as a flexible supplement to fixed holidays. Some employees may decide to use them for religious observances, cultural events, birthdays, or anniversaries. Others may prefer a quiet day to recharge outside the traditional holiday rush.

Understanding the floating holiday's meaning is key to building a more inclusive, employee-centric workplace. These days off empower staff to honor their values, not just the national calendar.

Want to see how diverse cultural traditions shape personal days off? Don’t miss this article on Day of the Dead celebrations around the world for a great example of how cultural beliefs influence holidays beyond the standard calendar.

How do floating holidays work?

Implementing floating holidays successfully requires structure and clarity. So, how do floating holidays work from a policy standpoint? (Or, if you prefer search engine grammar – how does floating holidays work.)

Companies typically allocate one or two floating holidays annually per employee. Common policy considerations include:

• Eligibility (e.g., full-time vs. part-time employees)
• Notice requirements
• Blackout dates or business-critical periods
• Approval processes (e.g., manager sign-off)

It’s important to note: floating holidays are not legally mandated. They are an optional benefit, not an obligation. However, they’re increasingly considered a best practice – especially among employers prioritizing equity, well-being, and cultural awareness.

Are floating holidays paid? Do you get paid for floating holidays?

• Naturally, HR teams and leadership ask: are floating holidays paid? The answer: yes – almost always. Floating holidays are typically paid days off, just like fixed holidays.
• But here’s a more nuanced question: do you get paid for floating holidays that remain unused? Or, are floating holidays paid out upon termination?
• Policies differ. Some organizations treat floating holidays like PTO, offering payout upon departure. Others do not. The key is consistency – and ensuring your policy is clearly communicated to both employees and managers.
• Compared to general PTO, floating holidays are usually not intended for long vacations. Instead, they support shorter, intentional absences tied to personal significance or wellbeing.

When can you use floating holidays?

With great flexibility comes the need for clear parameters. So, when can you use floating holidays?

Best practice includes:

• Setting expectations for advance notice (e.g., one to two weeks)
• Establishing blackout dates during peak operational periods
• Empowering managers to approve or decline requests based on business needs

While some guardrails are important, the underlying goal is to support autonomy. Employees value the ability to choose meaningful time off – and this autonomy can significantly impact job satisfaction, engagement, and retention.

Do floating holidays roll over?

A common administrative question: do floating holidays roll over into the next calendar year?

There’s no universal standard, but most organizations follow one of two approaches:

• Use it or lose it – employees must take their floating holidays within the year
• Limited rollover – unused days may carry over, typically with an expiration window (e.g., 90 days)

Each approach has pros and cons. Rollover options provide added flexibility, while “use it or lose it” encourages employees to actually take the time they need. The best path depends on your company culture, workload cycles, and how you manage other types of leave.

List of floating holidays & common examples

To support inclusive planning, consider offering a pre-defined list of floating holidays that employees can choose from, while still allowing flexibility. Examples might include:

• Employee birthday
• Religious holidays not included in your standard calendar (e.g., Diwali, Eid, Yom Kippur)
• Cultural observances (e.g., Juneteenth, Lunar New Year, Pride Day)
• Personal milestones (e.g., work anniversaries, mental health days)

Floating holidays should be designed to reflect your workforce – not just the dominant culture or default norms. Inclusive calendars build trust and show respect for individual identities.

Floating Holidays 2025

Planning for floating holidays 2025? Now’s the time to review your upcoming business calendar and make any updates to your time-off policies.

Proactive communication is key. Inform employees early in the year about how many floating holidays they’ll receive, how they can request them, and any deadlines for usage. This ensures smooth scheduling and helps managers plan for coverage in advance.

How to incorporate floating holidays into your company policy

Ready to roll out floating holidays? Here’s how to make it happen:

• Determine eligibility – who receives floating holidays, and how many per year?
• Define usage rules – set approval processes, blackout periods, and rollover policies.
• Clarify pay structure – will unused days be paid out? Are they treated like PTO?
• Update your employee handbook – include floating holiday guidelines in writing.
• Train managers and HR – ensure consistent messaging and application across teams.
• Communicate proactively – launch the benefit with a clear internal campaign and FAQs.

Don’t underestimate the importance of alignment. A well-implemented policy boosts satisfaction. A vague one? It creates confusion and frustration.

Few final thoughts – are floating holidays right for your company?

Are floating holidays the right fit for every organization? Not necessarily. But for companies striving to create flexible, inclusive, and employee-centered workplaces, they’re a powerful tool.

They demonstrate cultural awareness, support well-being, and offer a meaningful (and cost-effective) addition to your benefits' strategy. The result? Happier employees, better retention, and a reputation as an employer who gets it.

And that’s a benefit that never goes out of season.

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