What is a floating holiday? How does it work?

A floating holiday is a paid day off that each employee can decide when to take. A floating holiday is a benefit some employers offer employees in addition to vacation or PTO. 

By Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Have a quick question? I answered nearly 1500 FAQs.


In recent times, floating holidays have also become popular in many workplaces as a way of providing employees with options on when they can take time off. This article presents a comprehensive analysis of floating holidays their main differences in comparison to paid time off PTO and paid vacations their application benefits cons legal regulations, as well as the peculiarities of implementing a policy on floating holidays.

Floating holidays have also become a significant advantage in contemporary employment arrangements, which provide freedom and options for workers. In this article, our employment attorney for workers rights discusses the legal aspects of floating holidays, touching on what it entails, its legislative support and how they impact both employers and employees. This article aims at shedding light on the rights and responsibilities associated with floating holidays by reviewing relevant legislation and case law.

Defining Floating Holidays

Other leave days, called floating holidays or personal days or discretionary days, are paid by the employers which employees can use based on their choice. Unlike statutory holidays that fall on particular dates each year floating holidays can be used by employees on any day that suits them subject to some restrictions.

Statutory Support

There is no clear definition of floating holidays in federal legislation. However, employers do have the option to provide these days as part of their total benefits package. Floating holidays are not mandated by the Fair Labor Standards Act FLSA, however employers must meet certain guidelines with regard to paid leave including The Family and Medical Leave Act FMLA Americans with Disabilities Act ADA.

The Employer’s Role

1. Implement a Floating Holiday Policy

Employers should create a written policy indicating the terms and conditions of floating holidays to provide intelligibility and cohesiveness. A floating holiday policy should determine the requirements of eligibility, notice provisions and restrictions associated with using a floating holiday.

Employers can develop rules regarding floating holidays with the condition that these rules align with relevant laws governing employment. The National Labor Relations Act NLRA allows employees the right to bargain collectively and negotiate the terms of their work, including holidays that can be taken when they are convenient for them.

2. Equality and Anti-Discrimination

Employers are to make sure that providing floating holidays is equal and impartial. All employees should be treated the same way regardless of protected characteristics for example race, gender or religion as well as disability.

Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate in employment based on race, color, religion, sex or national origin. EEOC enforces these provisions and is responsible for investigating complaints of discrimination. When implementing the floating holiday policy, employers should comply with these laws to avoid adverse legal consequences.

Employee Rights and Responsibilities

A. Eligibility and Accrual

There could be various conditions underlying the eligibility of employees for floating holidays, such as length of service, status of employment full time A part time , or collective bargaining agreements. Employers should specify the requirements for eligibility and develop policies defining how floating holidays accumulate.

Although the federal law does not focus on floating holidays directly, the FMLA provides eligible employees with the opportunity to take unpaid leave for specific family and medical issues. Employers may decide to include floating holidays in their FMLA leave policies, whereby employees can use such days as part of their unpaid leave.

B. Notice and Scheduling

When employees plan to utilize a floating holiday, it often requires them to provide notice of their intention in advance to their employer. Employers may determine reasonable notice periods in order to maintain an operational efficiency and adequate employment levels. Nevertheless, employers should also take into account the possibility of providing an accommodation for unpredictable situations or emergencies that demand a timely use of a floating holiday.

Floating holidays are something the FLSA does not mandate any specific notice requirements for. However, employers are still subject to state-specific employment laws that may require notice obligations. For instance, some states mandate employers to present employees with written notice of their rights and responsibilities toward paid leave, including floating holidays.

C. Limitations and Restrictions

Floating holidays may be limited by blackout dates and or the number of days that can be taken in a row. Employers can establish reasonable restrictions to avoid abuse or disrupting business operations.

Employers have wide discretion in establishing restrictions to floating holidays as long as no employment laws apply. The NLRA preserves employers’ rights to control their workforce and implement fair rules, policies and even floating holidays.

Implications for Employers and Employees

A. Benefits for Employees

Floating holidays offer employees greater flexibility to cater to personal issues, religious customs or other events that are not typical public holidays. This benefit helps in improving employee morale, work-life balance and job satisfaction. It enables employees to personalize their time off according to their own needs thereby fostering a healthy workplace.

Floating holiday sentence: Floating holidays are also a good benefit because employees can use them for personal or religious reasons while still not affecting their allotted vacation time.

B. Considerations for Employers

By providing floating holidays, employers are able to attract and retain the best talent as this benefit shows that they care about their employees’ working life balance and general well-being. However, employers must take care in the roll-out and management of floating holidays to ensure adherence to relevant statutes, avoid prejudice and preserve operative effectiveness.

Floating holiday sentence: Employers have to find the right balance between providing the increased flexibility of a flexible holiday plan and ensuring that they do not ruin the efficiency with which their business operations run.

Floating Holidays vs. Paid Time Off (PTO)

Floating holidays and PTO are terms often used interchangeably although they differ. PTO is a reserve of hours or days that employees can take when they want off for any reason such as vacation, illness, or personal business. A floating holiday, on the other hand, describes one special day off that an employee can use as heshe pleases generally for personal or religious reasons.

Floating holidays are not explicitly addressed in the Fair Labor Standards Act (FLSA); however, this act outlines provisions for paid time off and other leave entitlements. (29 U.S.C. § 203)

Floating Holidays vs. Paid Holidays

While there is time off work with floating holidays and paid holidays, the two concepts differ in terms of flexibility and eligibility. Paid holidays are the designated days off, such as New Year’s Day or Independence Day, through which all companies take turns. On the other hand, floating holidays give a choice to employees for taking leave at their convenience – on personal days or during religious occasions.

Pros and Cons of Offering Floating Holidays

a. Pros:

  1. Enhanced employee satisfaction: Floating holidays offer employees more freedom and flexibility, leading to greater job satisfaction and morale.
  2. Accommodation of diverse needs: By providing floating holidays, employers can cater to employees’ different religious, cultural or personal celebrations thus promoting inclusivity and respect.
  3. Increased productivity: Employees will be more productive if given the chance to take time off from work when they need it and come back to work refreshed and motivated.
  4. Attraction and retention: Importantly, offering floating holidays can be a compelling benefit for potential employees and lead to better employee retention.
  5. Cost-effective: Employers might also be able to save some costs by giving employees an opportunity to enjoy a floating holiday as opposed to pay for more paid leaves.

b. Cons:

  • Scheduling challenges: It may cause problems with managing staff levels and maintaining the continuity of operations for employers when employees take their floating holidays in different days.
  • Abuse of policy: Float holidays can be abused by employees if not properly controlled or monitored, causing potential staffing problems and decrease in productivity.
  • Administrative complexities: Managing and implementing a floating holiday schedule necessary preparation, communication, reporting which requires time for human resource departments.
  • Inequitable distribution: Allocation of the floating holidays might create perceived favoritism or inefficient distribution among employees, if not addressed properly.
  • Legal compliance: Employers’ floating holiday policies should also adhere to the relevant employment laws, thus avoiding possible legal consequences.

Do Companies Need to Offer Floating Holidays?

Employers are not required by federal law to offer floating holidays. However, employers retain the option to provide floating holidays among employee benefits. As state laws may differ, it is also necessary to review appropriate state statutes and regulations in order to identify potential legal requirements relating to floating holidays for employers.

What Should a Floating Holiday Policy Include?

A good floating holiday policy must cover important points to ensure it is clear, fair and compliant. Some essential elements to consider include:

  1. Eligibility: Clearly define which employees qualify for floating holidays, such as how long the person has been with the company or their status of employment.
  2. Accrual and allocation: Define how floating holidays are accumulated, given and communicated to employees in a clear way, ensuring that everything is done fairly.
  3. Request and approval process: Describe how to apply and accept floating holidays, including the need for advance notice of requests, manager approval, and restrictions on simultaneous applications.
  4. Carryover and expiration: Clearly identify whether the unused floating holidays can roll over into the next year or if they expire at the end of such period.
  5. Record-keeping: First create a mechanism that records and documents the use of floating holidays accurately, ensuring compliance with requ …
  6. Non-discrimination: Comprise stress on the fact that floating holidays should not be distributed or denied depending on such discriminatory grounds as race, religion, gender, or any other protected characteristic.


Floating holidays provide an excellent alternative for workers to manage their personal and professional lives more effectively, while businesses gain increased efficiency when dealing with time-off inquiries. The distinctions between floating holidays, PTO and paid holidays, as well as the pros and cons associated with floating holidays are crucial to understanding for both employers and employees. Clear policies and legal compliance can help employers successfully integrate floating holidays into the company’s benefits package, enhancing the working environment and employee satisfaction.

These floating holidays are a popular trend in modern employment practices. This is an additional paid leave that employers can offer their employees even though not defined as such explicitly in the federal statutes. By complying with applicable employment statutes, designing known policies, and encouraging fairness and equity, employers can effectively apply floating holidays leading to increased employee satisfaction levels and improvements in work-life balance. Knowledge on the legal environment of floating holiday benefit is critical for both employers and employees to make effective use of this provision.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment Law

Most recent blogs:

HRIS - The Essential Tool for HR Management

HRIS: The essential tool for HR management

HRIS systems help manage and automate payroll, timekeeping, and benefits administration, enhancing overall HR efficiency. Modern cloud-based HRIS solutions offer increased data storage, security, and seamless integration with other HR applications.
What Is a Statutory Employee - Criteria, Taxation, and Example

What is a Statutory employee? Criteria, taxation, and example

A statutory employee is a freelancer treated as an employee for tax purposes, meeting specific criteria for Social Security and Medicare. These workers receive W-2 forms, allowing tax deductions for job-related expenses, but typically lack regular employee benefits.
Disparate Impact - What it Means, How it Works, History

Disparate Impact: What it means, how it works, history

Disparate impact refers to neutral policies that disproportionately affect protected groups, impacting areas like housing and employment. Federal regulations allow evaluating these impacts to identify and prevent discrimination.
What is Employer of Record (EOR)

What is Employer of Record (EOR)?

An Employer of Record (EOR) simplifies global expansion by handling payroll, benefits, and compliance, saving businesses time and resources. Companies can achieve a global presence without the complexities and costs of establishing a new office or entity.
What is EPL insurance

What is EPL insurance?

EPL insurance protects businesses from the high costs and disruptions of employment claims, covering legal fees and settlements. Safeguard your company from claims of harassment, discrimination, and wrongful termination with comprehensive EPL insurance.
Does employer match count towards the 401k limit

Does employer match count towards the 401k limit?

Employer 401k matches do not count towards your individual contribution limit, offering extra retirement savings. In 2024, the total 401k contribution limit, including employer matches, is $69,000 or 100% of your compensation.
What are employer payroll taxes

What are employer payroll taxes

Understand employer payroll taxes and the complexity of calculating the correct amounts, including contributions to Social Security and Medicare. Learn the importance of accurate payroll tax management to avoid potential penalties.
What is a Professional Employer Organization

What is a Professional Employer Organization?

Discover how a Professional Employer Organization (PEO) can streamline your HR responsibilities and provide expert support for a fraction of the cost. Learn about the various services offered by PEOs and how they differ from staffing agencies.
Everything you need to know about employee retention credit

Everything you need to know about employee retention credit

Explore the benefits of the Employee Retention Credit, a tax incentive designed to encourage businesses to maintain their workforce during the COVID-19 pandemic. Learn how to apply retroactively for this credit and maximize your business's financial recovery.
Will my employer know if I take a 401k loan

Will my employer know if I take a 401k loan?

Learn how taking a 401k loan is visible to your employer and understand the implications and conditions they might impose. Discover privacy rules around your 401k and employer's role in setting loan terms.
The largest employer in the US

The largest employer in the US

Discover the biggest employers in the US and learn which industries dominate the employment landscape, with insights into post-Covid economic recovery. Understand job stability and opportunities within these large companies despite economic fluctuations.
How to write a retirement letter to your employer

How to write a retirement letter to your employer

Craft an effective retirement letter with these straightforward tips, ensuring a smooth transition and maintaining positive relations as you step into retirement. Discover how to communicate your retirement plans clearly and respectfully.
What is employer branding

What is employer branding?

Discover the power of employer branding to attract top talent and improve your company's reputation. Learn key strategies to enhance your organizational appeal to prospective employees.
Questions to ask in an interview as an employer

Questions to ask in an interview as an employer

Use these key interview questions to gauge whether candidates align with your company’s culture and job requirements. Evaluate potential hires effectively with tailored queries in any interview setting.
Performance Appraisal

Performance Appraisal

Performance appraisals are crucial for making decisions about promotions, bonuses, and training; they can significantly enhance employee productivity if utilized effectively. This article details how to conduct effective performance reviews and utilize them to boost engagement and performance.


Absenteeism in the workplace can severely impact productivity and revenue, costing billions annually. This article addresses effective strategies and the importance of a skills matrix in managing absenteeism.
Recruitment Process

Recruitment Process

Learn about the full-cycle recruitment process, its benefits, and the six primary steps from preparation to onboarding in this detailed guide. Understand how a streamlined recruitment approach enhances efficiency and candidate experience.
Employee Onboarding

Employee Onboarding

Discover how effective onboarding strengthens employee-employer relationships, enhancing retention, job satisfaction, and performance. Learn to design tailored onboarding processes to build lasting bonds with new staff in this detailed guide.
Examples Of Orientation

Examples Of Orientation

Understand how a structured job orientation can ease new employees into their roles, improving both productivity and retention. Learn about the essential elements that make up an effective job orientation program.
Interview Guides

Interview Guides

Review the benefits of using an interview guide to streamline candidate evaluations and ensure a consistent interview process across your organization. Delve into the seven essential components that make up an effective interview guide.
Employee Performance Metrics

Employee Performance Metrics

Review the essential role of employee performance metrics in evaluating workforce productivity and effectiveness within an organization. Analyze the different categories of performance metrics and how they impact strategic HR decisions.
Strategic Workforce Planning

Strategic Workforce Planning

Learn about the importance of strategic workforce planning in ensuring a business is equipped for success both now and in the future. Discover how implementing this process effectively meets a company's current and future staffing needs.
Learning Is Developmental

Learning Is Developmental

Grasp the significance of learning and development in fostering a skilled workforce capable of facing challenges and thriving in the business world. See how strategic employee training is vital for achieving organizational goals and securing a competitive advantage.
Human Resources Planning Process

Human Resources Planning Process

Understand the critical role of human resource planning in preparing a workforce for future needs and maintaining a competitive edge. Examine the structured steps and benefits of effective HR planning processes in achieving organizational goals.
Compensation Types

Compensation Types

Gain insights into the various types of employee compensation and understand how to create competitive benefit packages to attract and retain talent. Review the importance of a well-structured compensation plan in enhancing employee satisfaction and boosting retention.
Sabbatical Leave

Sabbatical Leave

Understand the benefits of sabbatical leave for both employees and employers, and the key elements of effective sabbatical policies. Explore successful sabbatical programs from companies like Autodesk and Patagonia, and their impact on workplace dynamics.


Navigate the world of HR KPIs to measure and enhance your human resources management effectiveness and align with organizational goals. Understand the vital role of KPIs in achieving fair compensation and strategic HR outcomes.

Contact our attorney.

Please tell us your story:

5 + 3 = ?