HR Glossary  >   Restricted Holidays

Restricted Holidays

What are Restricted Holidays?

Restricted holidays are the holidays for which the employees have the option to choose whether or not to take leave. In other words, the company’s list of restricted holidays could include many, but the employee is offered a chance to choose a maximum of 2 optional holidays from the list. It isn’t mandatory to keep the office closed during such holidays. The restricted holiday meaning can be further cleared with the below illustration.

For example, a company doesn’t provide holidays for Eid. One of its employees is of the Muslim caste and needs to take leave on Eid. Under such conditions, the employee can apply for a restricted holiday.

What are the types of restricted holidays in an organization?

Restricted holidays, also known as optional holidays or personal choice holidays, are additional holidays that employers may grant to employees in addition to mandatory holidays. These holidays are optional and are at the discretion of the employee.

#1. Optional holidays

These are specific days employees can choose to take off based on personal, cultural, or religious reasons. These holidays are not mandatory and are not universally observed by all employees. Employees can select these holidays based on their personal preferences or beliefs.

#2. Personal choice holidays

These holidays are designated as paid time off that is not mandatory, and the employee can choose whether they want to take leave on those particular days. It allows employees to decide when to take leave based on their priorities or preferences.

By offering these types of restricted holidays, companies acknowledge and respect their employees' diverse cultural, religious, and personal needs, fostering an inclusive work environment.


Why are restricted holidays necessary for an organization?

Here are some of the key reasons why restricted holidays are important for an organization:

Promotes inclusivity and diversity

By offering a list of rеstrictеd holidays from different rеligious and cultural backgrounds and organizations acknowlеdgе and rеspеct thе divеrsе backgrounds of thеir еmployееs. This makеs all еmployееs fееl valuеd and includеd.

Improves employee morale and engagement

When employees feel their personal and cultural needs are respected, it boosts their morale, happiness, and engagement. Employees will be more motivated to work for a considerate organization.

Flexibility for employees

Not all employees may observe the same set of mandatory holidays. Restricted holidays allow employees to choose holidays that align with their needs and preferences.

Attract and retain talent

Offering restricted holidays and mandatory holidays makes the organization appear more progressive, considerate, and employee-centric. This helps attract and retain the best talent in a diverse and competitive market.

Increased productivity

Employees who feel their needs are being met tend to be more satisfied and focused at work. This can increase the overall productivity and performance of the organization.

Compliance with labor laws

In many countries, providing restricted holidays is necessary to comply with various labor laws regarding religious freedom and anti-discrimination in the workplace.

Rеstrictеd holidays play an important role in fostеring an inclusivе work culturе to improve еmployее еxpеriеncе and complying with lеgal rеquirеmеnts. This ultimately bеnеfits thе organization.


Key benefits of restricted holidays

Here are some key benefits for an organization:

Increased productivity

Restricting holidays to certain days means more employees will work on regular business days. This allows smoother operations and workflows without as many people being out simultaneously.

Better planning

With a set restricted holiday calendar, organizations can plan projects, deadlines, and meetings around the holidays when most staff will be present. This improves scheduling and coordination.

Cost savings

Fewer people taking off time together means reduced need to hire temporary staff. It also lowers overtime costs when holidays don't disrupt workflows as much.


All employees generally have the same restricted holidays, providing more consistency in operations, customer service, and client/partner communication throughout the year.


For companies that work with government agencies or have regulatory compliance, restricted holidays align with national/regional statutory holidays when authorities are closed.

Continuity of service

Critical functions like customer support, procurement, or production are less likely to face delays or shutdowns on restricted holidays as key staff will be available.

Employee satisfaction

Restricted holiday policies provide clarity on time off. They can also be more flexible in meeting employee work-life balance needs than statutory holidays.


Frequently Asked Questions

What is the difference between a restricted holiday and a gazetted holiday?

Restricted holidays are optional holidays that an employee can take at any time in the year. On the contrary, gazetted holidays are compulsory holidays in institutions such as banks, schools, and businesses.

How many restricted holidays can an employee take in a year?

Many holidays are restricted, but an employee is entitled to take only two holidays whenever he wishes.

Are restricted, optional, floating, and flexi holidays the same?

Yes, all four types of holidays are similar. In each holiday type, the employee can voluntarily avail leave from a list created by the HR, but in a limited quantity as decided by the company’s policy.

Why should restricted holidays be entitled to employees?

As an ideology to embrace different religions and cultures, the employer may choose to offer restricted holidays. For this, a list of optional holidays is created, which could not be considered in the main culture and is different from the company’s holiday calendar.

What are the disadvantages of restricted holidays for an organization?

HR should clearly explain how and when the floating holidays should be used because it may negatively impact business productivity.

If the expectations are not discussed, the employee may end up taking optional leave during the peak period of the month. Another disadvantage is that the company may have to encash the optional leaves if the dates are not predefined.

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