Employees Love Floating Holiday Policies

Seattle will be celebrating Indigenous Peoples Day. This day is also Columbus Day, which many organizations observe. Indigenous Peoples Day celebrates Native American culture and history rather than Christopher Columbus, the Italian explorer.

Companies can learn a lot from this experience when they think about their holiday policies. Companies must consider whose experience is being prioritized in any paid holiday set. A flexible holiday policy can foster a sense of belonging among all employees. Flexibility is important because no one holiday will be meaningful to every employee.

Mikaela Kiner, founder and CEO of Reverb, stated that “people need flexibility. When people have that flexibility, they are more engaged, productive, and likely to remain with the organization.”

  • According to the holiday schedule survey, 30% reported that companies offer employees at least one floating holiday per year. Employees can choose any holiday or other significant day as their floating holiday. These days are not transferable from one year to the next if they are not used.
  • Holiday swapping is a lesser-known benefit reported by 18% of Holiday Schedule Survey respondents. It allows employees to trade out company holidays they don’t celebrate for one, not on the list.
  • Some employees may not be religious and feel that paid holidays, even self-selected, are out of line with their beliefs. This is due to the religious connotation attached to holidays. Consider expanding the definition of holiday to include a day of personal significance. This could be an anniversary, graduation date or anything entirely personal when explaining holiday swapping to employees.
  • You can be creative in the design of holidays to promote company values. If civic engagement is important, you might consider making election day a holiday. Consider allowing employees to celebrate their birthdays if fun and work-life balance are your core values.
  • Recognize the traditions of your employees. A multi-cultural calendar can be useful for keeping employees informed about important holidays and events. The University of Missouri has a guide to the religious holiday that includes recommended accommodations, such as providing food accommodations or avoiding deadlines.

Floating Holidays

Employers also use floating holidays to keep their top talent happy and attract new talent. Employers offer employees a floating vacation as an additional benefit to their vacation or PTO days. A floating holiday is a payday that can be used as a substitute for a public holiday. 

The employee can choose the day they want to use their floating holiday. Many employers offer floating holidays to accommodate diverse religious beliefs and cultures. Many employees observe religious holidays and traditional holidays outside of the company’s official calendar. Floating holidays allow your staff to celebrate these holidays.

Consider, however, that your business does not already celebrate public holidays such as Presidents’ Day and Martin Luther King Jr. Day. These public holidays can be observed by employees using floating holidays. Although there are no restrictions in the Fair Labor Standards Act (FLSA), floating holidays can be offered to employees. However, this could make your team feel more valuable if you offer flexibility for time off. It allows employees to use more PTO to cover vacations, sick days, and other personal expenses.

A floating holiday combines PTO with an actual holiday, such as Independence Day or Christmas. If a floating vacation is not tied to an event, you would have to pay it out. This is because your PTO policy will apply and any applicable state law.

However, an employee who leaves in July and is not entitled to Christmas Eve pay will not be eligible for a payment if the floating holiday is tied. Because his right to receive Christmas Eve pay was tied to being employed through Christmas Eve, he couldn’t get that payment.

Defining Expectations

Employees need to be clear about what to expect regarding floating holidays. Is there a set day, or can employees choose from any day they like? Let’s say that Christmas falls on Thursday. You might offer the Friday following Christmas as a floating vacation to give your employee a long weekend off. You might also offer Monday floating holidays if the Fourth of July falls on a Tuesday. It all boils down to what is most beneficial for your business in a given calendar year.

Every business is different and has unique requirements. Let’s say your company is manufacturing. It would be best if you met peak demand in December. Your plant will need all hands to keep up with demand. You can’t allow your top workers to take the day after Christmas as a vacation. It would be best if you covered all your shifts. 

All these factors should be considered before deciding whether floating holidays are a good idea. It is important to communicate your expectations in your PTO policy, employee guidebook, and other documents.



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