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Pay for ‘Floating Holiday’ Depends on Your Policy

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Q. We gave eligible employees a “floating holiday” in lieu of having Dec. 31, 1999, as a paid holiday. We generally pay employees for all unused vacation, sick and personal time upon termination, but we have no policy regarding an unused floating holiday. Do we have to pay workers for any unused floating holidays upon termination? Does it make any difference if the employee requested the day off but the supervisor denied the request? —C.R., Illinois

A. In general, payment upon termination for unused vacation and other time-off benefits is at the employer's discretion. Thus, your company can decide whether to pay for the unused floating holiday. Whatever you decide, make sure that your written policy is clear on whether employees will receive compensation for an unused floating holiday. Explain that floating holidays should be requested in advance and that the requested date must be approved in advance.

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