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Annual leave

What is a Floating Holiday?

In the modern workplace, employee benefits and time-off policies evolve to meet the needs and preferences of top talent. One such benefit is the concept of floating holidays. 

In this article, we will explore what a floating holiday is, how it differs from conventional leave, and the benefits of making it a part of your business's policies.

What is a Floating Holiday?

A floating holiday is a customisable and flexible leave benefit that allows your employees to choose when they take a day off, with the option to celebrate events of personal significance like birthdays or anniversaries.

The "floating" part means that the holiday can move or adapt to your employee's needs, giving them more control over their time.

Floating holidays can serve many purposes. They can be used as substitutes for certain public holidays, personalised celebrations, or to accommodate religious or cultural events that may not align with your business's usual calendar.

Benefits of Offering a Floating Holiday

A floating holiday policy can provide several advantages to both you and your employees. Here are some of the key benefits:

Flexibility for Employees

Floating holidays gives employees the ability to choose when to take time off. This flexibility helps improve their work-life balance, which can lead to increased productivity and reduced burnout. It helps show your employees that you respect their time by allowing them to plan appointments and engagements at their convenience.

Attracting and Retaining Talent

In a competitive job market, offering floating holidays as part of your employment package can make your company more attractive to potential job seekers. It shows your commitment to flexibility and a positive work-life balance. Promoting this benefit in job descriptions and interviews can be a compelling factor in talent acquisition.

Cultural and Religious Inclusivity

By offering floating holidays, your business can embrace a range of cultures and religions. This inclusive approach means that employees from diverse backgrounds can observe their significant cultural or religious events, even if they are not recognised as an official public holiday.

Maintaining Operations

Floating holidays can be a tool for keeping your business open during public holidays. Some employees may choose to work during holidays that are not part of their traditions. 

It is also important to check regulations in your state or territory regarding keeping your business open and pay during public holidays.

Preserving Annual Leave for Other Needs

Your employees may encounter personal or family situations that require unplanned leave. Floating holidays can serve as a flexible solution, allowing them to address these needs without using their regular holiday time. 

Compensation for Mandatory Work

In cases where employees are required to work during standard holidays due to strict schedules or deadlines, floating holidays provide a way to compensate by allowing them to take a day off at a more convenient time.

Considerations for Your Floating Holiday Policy

Some things to consider when implementing a floating holiday policy include the following:

  1. Number of Floating Holidays - Determine how many floating holidays employees will receive each year. As an example, you can start with two floating holidays, but the exact number can vary depending on your business’s needs.
  2. Request Procedure - Establish a clear procedure for requesting a floating holiday. Specify the advance notice required, whether manager approval is necessary, and consider implementing a tracking system for these days, similar to other types of paid leave.
  3. Carryover and Compensation - Decide whether employees can carry over unused floating holidays to the following year. If not, clarify whether they will be compensated for unused days when leaving the company. Ensure that these details are clearly outlined in your policy.
  4. Differentiating from Holiday Days - Clearly communicate the difference between floating holidays and standard holiday time. For example, floating holidays can be granted when an employee joins the business and doesn’t accumulate over time.

Do You Need to Provide Floating Holidays?

There are no legal requirements obligating you to offer floating holidays. However, some businesses choose to provide this benefit voluntarily as a means of promoting inclusivity, flexibility, and work-life balance. This perk may help you recruit the best talent for your workforce, helping them choose you over other employers. 

Offer Your Employees Floating Annual Leave Today

By offering floating holidays, your business can demonstrate its commitment to inclusivity, valuing the cultures and traditions that make up its workforce. It also allows you to attract and retain top talent in a competitive job market, showing potential job seekers that you prioritise employee well-being and flexibility.

Integrating the use of tools like QuickBooks Online can help your business streamline the management of floating holiday policies and employee compensation. 

QuickBooks Payroll gives you the ability to track and account for leave, including floating holidays. Making the implementation of floating holidays even more seamless with the help of QuickBooks Online. Try QuickBooks Online today with a free 30-day trial.

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