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What is a floating holiday? Is it considered PTO?

Floating holidays are discretionary paid leave days, not tied to specific dates like traditional holidays. They offer employees flexibility to observe personal or cultural events, promoting inclusivity by accommodating diverse needs within the workforce.

Alexandros Pantelakis
Alexandros Pantelakis

HR content specialist at Workable, delivering in-depth, data-driven articles to offer insights into industry and tech trends.

As an HR professional or an employer, you’re not a stranger to the complexities of managing time off. One concept that’s gaining traction is the idea of “floating holidays.” But what are they, and how can they benefit your organization? Let’s dive in.

What are floating holidays?

Floating holidays are typically paid days off that employees can use at their discretion. Unlike fixed holidays, such as Christmas or Independence Day, floating holidays can be used on any day that the employee chooses.

They were introduced to accommodate the diverse cultural and personal needs of employees, offering a more inclusive approach to time off.

Can you use a floating holiday anytime?

In most cases, yes. The beauty of floating holidays is their flexibility. However, company policies may dictate certain restrictions, such as requiring advance notice or prohibiting use during peak business periods. It’s important to clearly communicate these policies to avoid confusion.

For example, an employee might use a floating holiday to observe a religious event, celebrate a personal milestone, or simply enjoy a long weekend.

Are floating holidays paid out?

Typically, floating holidays are paid days off. However, whether unused days get paid out at the end of the year or upon termination varies by company. Some organizations may allow a carryover to the next year, while others may have a “use-it-or-lose-it” policy. It’s crucial to clarify these details in your company’s time off policy to ensure transparency.

Floating hours: What does it mean?

While floating holidays are entire days off, floating hours refer to flexible hours that an employee can add to their workday.

For instance, an employee might start work early one day and leave early another day.

This flexibility can boost employee satisfaction and work-life balance. However, like floating holidays, clear policies are needed to prevent misuse and ensure fair application.

How many companies offer floating holidays?

While exact numbers fluctuate, various HR surveys indicate that a significant number of companies – particularly those with diverse workforces – offer floating holidays.

This trend is growing as organizations recognize the benefits of flexible time off in attracting and retaining talent. As an HR professional or SMB employer, it’s worth considering if this approach aligns with your company culture and operational needs.

Floating days around the world

Floating days vary from country to country. In this section, we will discuss the most common cases worldwide.

Floating days in the US

Floating holidays in the US can be used for any day the employee chooses, but they are often used for observances like Martin Luther King Jr. Day, Presidents’ Day, or personal events like birthdays if these days are not already recognized by the employer.

Some companies also allow employees to use a floating holiday for New Year’s Eve if it falls on a weekend.

Floating days in Europe

In Europe, the practice of floating holidays is becoming increasingly common as companies recognize the need for more flexible time-off policies.

These holidays are often provided as additional paid leave, allowing employees to observe personal, national, religious, or cultural events not recognized as public holidays.

For instance, Spotify, a Swedish company, has implemented a policy where employees can work on a public holiday and then exchange it for a day off at another time that holds more personal significance.

Similarly, in Italy, an employee might choose to work on Christmas Day, a recognized public holiday, and then use that day off at a later time that is more personally meaningful.

In the UK, this concept is less common, but it’s gaining traction. Employees might use a floating holiday to observe a cultural event, religious holiday, or personal occasion that isn’t recognized as a public holiday. The specifics would depend on the company’s policy.

Floating days in Australia

In Australia, some companies offer a “floating” public holiday per year, which allows employees to “swap out” an Australian public holiday for another day during the year to celebrate a religious or cultural holiday such as Chinese New Year or Diwali.

This approach is part of a broader effort to promote inclusivity and accommodate the diverse cultural backgrounds of employees.

Floating days in Asia

In Asia, this concept varies due to the region’s cultural diversity and differing labor laws.

For example, in China, employees might use a floating holiday for cultural events like the Lantern Festival, which aren’t recognized as public holidays.

Similarly, in India, a floating holiday could be used to observe widely celebrated festivals such as Diwali, which isn’t a public holiday in all areas.

Meanwhile, in South Korea, floating holidays could be used for cultural celebrations like Seollal, the Korean New Year, or Chuseok, the harvest festival, if these aren’t already recognized as public holidays by the employer.

How to implement floating holidays in your company

Implementing floating holidays requires careful planning.

Start by reviewing your current time off policies and considering how they could fit in. Consult with legal counsel to ensure compliance with labor laws.

Communicate the changes clearly to your team, explaining the benefits and any restrictions. Be prepared to handle questions and possibly adjust the policy based on feedback.

Floating holidays offer a modern, flexible approach to time off that can enhance employee satisfaction and inclusivity.

By understanding and implementing these policies effectively, you can position your organization as a forward-thinking employer that values its employees’ diverse needs.

As with any HR initiative, clear communication and thoughtful planning are key to success. So, why not float the idea in your next team meeting?

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