Unlike a holiday that the entire company observes, employees can choose whether or not to take a floating holiday as a paid day off or leave in their bank as an additional PTO day in the future.

Employers offer floating holidays to embrace difference in culture and religion. Oftentimes employees observe holidays which are not on the company holiday calendar and floating holidays allow the flexibility to observe these holidays. 

Employers are not required by law to offer these holidays, but they do signal to employees that work-life balance, culture, and flexibility are valued at the company. On average, employers offering floating days offer 1-2 days per year. 

When offering floating policies, it is important to have a clear floating holiday policy just as you would a PTO policy. When offering floating holidays, an employer should consider the following during policy development: 

• When employees can take floating days 
• What employees qualify for the holidays
• How many floating days to offer
• If the days will carry over to the next year if unused 
• If you will payout unused holidays (this can vary depending on state law)
• The process for using or requesting a floating day

From a payroll standpoint, it’s important to track these holidays as floating holidays can be paid or unpaid. In general, if a floating holiday can be taken at any time courts would consider it a vacation. If an employer specifies when a floating day can be taken, once that time period passes, so does the opportunity to take the floating day. As a result, it would not be paid. 

The most common paid holidays in the U.S. are:

• New Year’s Day
• Memorial Day
• Independence Day
• Labor Day
• Thanksgiving Day
• Christmas

Some organizations also recognize:

• Martin Luther King Jr. Day
• President’s Day
• Easter
• Columbus Day
• Veterans’ Day
• Black Friday
• Christmas Eve
• New Year’s Eve