How do you define a holiday? A day off when the mind is not burdened by any professional worry. Ideally, a holiday is a time off, a time to relax, to detox mind and body from the unlimited stress that persists every single day. What is better than a planned holiday? Just an unplanned one, taken spontaneously, to lie in and relax. True, vacations are rejuvenating. But there is nothing like taking a day or two off to get one’s vibe back, and then go back to work with a renewed zeal. Your employees also need it. This is where the floating holidays are useful.

In this article, we will be talking about the floating holiday definition, what is it, how to make a floating holiday policy, what are its advantages and what is not, and much more.

What is a Floating Holiday?

Floating holiday meaning is not that difficult to decipher. It can be understood in a few simple terms. There are festivals that fall on a specific date everywhere. Then there are those festivals with fluctuating dates. These are the ones known as floating holidays. Alternatively, the term floating holidays is also attributed to those day-offs that are taken as a substitute off or compensatory off, in place of working on a public holiday.

These holidays are not a part of the paid holiday schedule of the organization. It is an additional benefit provided to the employees. Further, neither FLSA (Fair Labor Standards Act) or any other law mandates the employer to provide the same. These holidays are given to the employees purely on the will of the employer, to include cultural diversity and flexibility in the organization, which in turn also boosts employee loyalty and productivity.

The employers who wish to give their employees floating holidays have to create paperwork for the same. It is important to create a floating holiday policy that defines the day-offs and the floating holiday pay, otherwise, there are chances of it being misused.

Floating Holiday vs PTO

This is perhaps the most asked question. For starters, the two are quite similar. However, they are not the same.

Perhaps, the biggest difference between the two is the manner and intent of providing the holiday. Employees can avail paid time offs and vacations if they have been working at the organization for a long time. Consider it a reward for persistence and loyalty. On the other hand, floating holidays are a part of a separate policy, with conditions with respect to expiring after a time and with the intent to encourage employee loyalty.

The employers decide other paid time off traits such as accumulation and carry forward, monetization in the case of exit, etc as per the holiday policy crafted.

Why are Floating Holidays Important?

It is important for the employees to unwind, and that is exactly why floating holidays are important, to give them that much-needed time off for some time. These are small snippets of relaxation as opposed to planned vacations and paid time offs, but serve as mini boosters to the morale and mind. Floating holidays are a testimony to the fact that sometimes just staying at home and relaxing serves as a great refresher in the midst of all the hustle at work.

Not only this, but these holidays also provide the employees with an element of flexibility in terms of taking a day off as a substitute for a festival they worked on. Further, many times due to geographical and cultural differences, respective state laws do not recognize certain festivals. Providing floating holidays is a great way to let the employees know that yours is a culturally diverse place that recognizes everyone and cares for the employees.

These elements of flexibility and diversity make the employees more satisfied, thus increasing employee loyalty and productivity and festering a better and healthier work culture. Happy employees work better and floating holidays are a great way of doing that.

What to Include in your Floating Holiday Policy?

Before you decide to give your employees floating holidays, you have to decide a few things. The employers need to draft a policy with all the relevant details in place, including relevant holiday pay. A policy is important because it ensures that employees do not misuse it or take advantage. It should be a truly diverse way of giving a short time off to the employees.

For instance, do you know that a floating holiday California policy is set using two approaches; unrestricted and restricted? In the case of the former, the employees can take these holidays any time of the year, while in the case of the latter, holidays are tied to specific events, and are thus restricted.

The point is that availing of such holidays depends on the company policy and also on the state rules if there are any. Mostly, government rules are about paid time off, with the company’s self-created floating holiday policy a nice cherry on the cake for the employees. Therefore, it is important to craft it carefully.

What to Keep in Mind While Drafting a Floating Holiday Policy?

floating holiday

Here are a few things to keep in mind while drafting your floating holiday policy:

  • Figure out who are the employees who will be eligible for availing floating holidays
  • Specify when the employees can exercise and claim their floating holidays. In the absence of such a clause, employees can take paid time off any time which can compromise work, especially during times of crisis
  • Define how many floating holidays an employee is eligible for, in a year
  • Mention ‘blackout periods,’ i.e. the times when the employees cannot use floating holidays. These vary, depending on the organization and industry
  • Specify the rules regarding the carrying forward of floating holidays. If not, include a clause wherein the remaining floating holidays of the year can be monetized
  • Include the mode of approval for floating holidays
  • Specify the regulations at the time of termination or exit of the employee and how they can monetize floating holidays along with their final settlement

If you notice the aforementioned points, a few basic things jump out. It is extremely important to figure out when can the employees avail floating holiday pay, in the case of leftover floating holidays and even employee exit. A good floating policy should be clear and without any confusion. It should have every clause in place and should not be a pain point, either for the employer or for the employee.

Floating Holiday Policy Sample You Can Take a Look at

You are now familiar with all that needs to go in a floating holiday policy. Let’s see it in action with the help of this example:

Company ABC will be providing each full-time employee with two days of floating holidays. This will be in addition to our standard paid holidays. You can find the details in the employee handbook.

You can use these floating holidays for birthdays, cultural holidays, volunteering, or even to spend time with the family.

Employees hired before July 1 will be eligible to avail floating holidays. In the case of employees hired after the said date and part-time employees, they can avail half-a-day’s worth of floating holiday.

Request floating holidays in advance, with the manager’s approval. You can even use your floating holidays in the case of a family emergency, in case you have exhausted your entire paid time off.

You can carry forward any unused floating holidays at the end of the year to next year and accumulate them. Please note that you can only do this once. If you do not avail them in the next year, your floating holidays would lapse.

You can monetize floating holidays like paid holidays if you exit from the company.

Please note that the aforementioned policies and conditions may change if the employee found guilty of violating company policies and their services are terminated.

What are the Benefits of Having a Floating Holiday Policy?

floating holidays

These holidays, if executed well via a crystal clear policy, serve as a great addition to the existing paid time off provided by the organization. They provide numerous benefits to the employees, indirectly being advantageous to the company. Following are some of the pros of having a floating holiday policy in place:

  • It helps the organization structure a good benefits package for the employees
  • Creates a diverse workplace by attracting more culturally aware hires
  • Results in happier and more satisfied employees that contribute to a healthier work culture
  • Makes the business thrive
  • Increases employee productivity, individually and as a team

A good policy further sets the organization apart from its competitors in the industry and can actually attract better employees and be better at retaining them. In today’s fast-moving culture where attrition is a norm, this is a great advantage to have.

Are there any Disadvantages of Giving Floating Holidays to the Employees?

Most of the time, these holidays are advantageous to the organization. However, to reap its benefits craft the floating holiday policy and pay in all its clarity. Also, the policy needs to clearly state the blackout period and other eligibility requirements. Otherwise, there can be confusion and chaos which can have the exact opposite effects.

The blackout period is specifically important here. The employees should know that they can avail the holidays, but should also be aware that they should not do that during times of crisis. Emergency situations, of course, are exempt from this.

What are Some of the Most Frequently Asked Questions about Floating Holidays?

Q. Is it important to keep a track of floating holidays?
A. Just like every other holiday or vacation, it is important to keep track of these holidays too. A proper system of approval and sanctioning makes the task easy and not cumbersome.

Q. Is it mandatory to give floating holidays?
A. There is no legal obligation to offer these holidays. However, the Civil Rights Act, 1964 surely states that employers should give time off to the employees for religious and cultural observances. Count floating holidays under that, and even under the circumstances when those holidays are utilized later on. So, while it is not a compulsion, it is definitely a good practice.

Do you Need to Give Floating Holidays?

Floating holidays have numerous benefits, the major one being attracting cultural diversity at the workplace. It is further a great way for employers to show that they care about employees’ work-life balance and overall well-being. Nothing boosts employee morale than short breaks with family and friends that can help them bounce all the way up.

Does your company have a floating holiday policy? What are the terms and conditions therein? Do share with us at @HarmonizeHQ.

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