06/17/2026
Adams Legal Corner
The Problem With Floating Holidays in California
A “floating holiday” is usually a paid day off that employees may use for any purpose and whenever they choose (sometimes the use period is constrained, but if that period is longer than just a few days, it does not change the legal calculus). Because the employee controls when to use the day, California is likely to treat the floating holiday as vacation time, even if the employer calls it something else. That’s important because vacation in California, unlike a paid holiday, is treated as earned wages. Once earned, the wages cannot be forfeited. That means unused floating holidays need to carry over from year to year until used, and must be paid out when employment ends.
The label for the paid day off is not controlling. Calling the benefit a “floating holiday,” a “personal holiday,” or something similar does not avoid California vacation-pay rules if the benefit functions like vacation. For California employers, the safer approach is usually to avoid floating holidays altogether.
Employers who want to be generous can instead grant additional vacation time and administer it as vacation, or provide true paid holidays tied to specific dates or events. –Adam K. Treiger, True Course Business Law, APC, Vice President of the Board