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2 minute read

What’s your company policy on floating holidays? 5 steps for success

Jennifer Weiss
by Jennifer Weiss
August 21, 2023
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If you’re like most employers, you offer paid holidays. But how about paid floating holidays? As we head toward year-end, consider your company policy on this.

Floating holidays can be a bit of a misnomer – they may have more in common with paid time off than with standard paid holidays, such as Thanksgiving Day.

For example, one company may give employees total freedom about how to use their floating holidays, even allowing them to be taken as mental health days.

On the other hand, a different employer may require that they coincide with official federal or state holidays.

Another variation is whether:

  • each employee picks his or her own floating holidays (as described above), or
  • a decision is made, for or even by a group of employees, toward the end of one year about which holidays to add to the company’s core holidays the next year – e.g., Tuesday, July 4 is a core holiday and then Monday, July 3 is added.

What to do

Here are five steps businesses can take to help create or implement a company policy on floating holidays:

  1. Consider how clear the policy is. Make sure employees understand whether usage of floating holidays is flexible or finite. Examples may help them. Also, explain whether the time off is paid or unpaid.
  2. If you have restrictions such as blackout dates – e.g., certain months of the year or days of the week – you could include that info in a shared calendar or other centralized spot.
  3. If your company policy states that the floating holidays can’t be carried over from one year to the next or cashed out upon termination, you may want to provide periodic reminders to employees regarding their remaining time off.
  4. Offer training to managers and supervisors regarding consistent application of your company policy. The last thing your company wants is a discrimination claim, especially given that floating holidays can be a way to acknowledge employees’ varied beliefs and backgrounds.
  5. Check that your payroll system is utilizing the correct codes for this type of time off.
Jennifer Weiss
Jennifer Weiss
Jennifer keeps readers current on Payroll news, covering topics such as employment taxes, fringe benefits and the Fair Labor Standards Act. She brings over 20 years of experience to the Resourceful Finance Pro staff.

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Resourceful Finance Pro, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day's headlines, Resourceful Finance Pro delivers actionable insights, helping Finance execs understand what Finance trends mean to their business.

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