Kin has spent some time deep-diving into paid time-off policies, from talking about what you need to know about the basics to how to create them. In this post, we’re going to take a look at how to manage time off around the holidays in a way that supports your employees while not ignoring your business needs.
Payroll is a fixed expense for which you have an allotted budget. And, holidays occur on specific days each year—so they aren’t going to be a surprise. Providing your employees with at least a few paid holidays is a standard benefit that isn’t too costly to businesses—and it feels great to offer this work-life balance perk to employees.
But when looking at what your time-off policy will provide, it’s important to consider what you will and won’t cover in regards to both mandatory and voluntary time off. To limit time-off headaches, have a well-defined policy, set clear expectations, and put a system in place for managing the time-off. If you don’t address these holiday time-off basics, you could find yourself without the staff you need at a critical time.
Voluntary time off
Time off falls into two categories: mandatory and voluntary, holiday time off falls into the latter. Voluntary time-off isn’t required by law, although some employers may be required by a labor union’s agreement to offer some types of voluntary time off. Some states may require specific holidays. Check out the SHRM State Chart: Holiday Leave Laws for a chart of legal requirements in specific states.
In addition to holidays, common types of voluntary time-off include:
• Personal days
• Sick leave
Small business holiday time-off policies
About 68% of small businesses provide paid holidays as well as vacation time-off for employees, according to the National Compensation Survey, which collects data about workers with access to various benefits.
Drafting a holiday time-off policy that balances employee needs and business demands can be difficult, especially in businesses that are in continuous operation, or rarely close (e.g., manufacturing, restaurants, and retail). Holiday schedules also bring up questions regarding compensation challenges when you require employees to work on holidays.
To set expectations about your holiday time-off policy:
• Publish an annual list of holidays with the dates when your business will not be open and place it in your onboarding and/or employee handbook documents
• Identify any holidays on which you will be open, and how many employees will be required to keep operations running smoothly
• Consider any incentives you can offer (e.g., bonus holiday pay) to those who are required to work
Common holidays observed by businesses
One way to determine what holidays you will observe is by looking at the data for other organizations before you create the holiday schedule. According to a survey conducted by the International Foundation of Employee Benefits Plans, the top ten paid holidays offered by employers are:
• Martin Luther King Jr. Day (45%)
• Presidents’ Day (45%)
• Christmas Eve (49%)
• Friday after Thanksgiving (77%)
• Labor Day (95%)
• Memorial Day (97%)
• Independence Day (98%)
• Thanksgiving Day (98%)
• Christmas Day (98%)
• New Year’s Day (99%)
Some employers offer paid “floating holidays” as a benefit. These days provide an employee with paid time off to observe a holiday which the company is not observing. According to the results of Society for Human Resource Management’s (SHRM) 2014 Holiday Schedules Survey, just over one-third of employers offered floating holidays in 2014. Those that did so provided up to five floating holidays per year to full-time employees. Floating holidays can also serve as an employee engagement tool, as employees appreciate that you recognize their individual holiday needs.
“We noticed that birthdays were an incredible time waster,” said Alon Barzilay, founder and CEO of the Philadelphia-based real estate firm, Barzilay Development.
“The amount of energy spent secretly signing birthday cards, ordering cakes, and singing songs is welcomed, but most employees would prefer to take time off for their birthdays and spend it with their friends and family. By adding one more floating holiday, ‘your birthday,’ we’ve created a corporate culture that differentiates us from most other companies.”
Each business must evaluate what makes sense for their operations and their employees. You may want to consider offering a floating holiday to allow employees the opportunity to observe a holiday of their choice, rather than requiring them to take off an arbitrary day of your choice. And, for a business that earns a substantial portion of its revenue during the summer months, it may not be feasible to offer Independence Day as a paid holiday. Likewise, if you stay open during the winter holidays, you’ll need to make sure you have staff lined up to help manage business needs. If you identify staffing needs on a holiday, and make employees aware of any time-off restrictions in advance (during the recruiting and onboarding process), you’ll face fewer disgruntled employees when they’re scheduled to work on a holiday.
Technology helps small businesses manage time-off
Many small businesses struggle with finding a way to manage time off. Out of desperation, these companies often use inefficient methods such as email, spreadsheets, and sticky notes to handle time off requests, approvals, and tracking.
In those cases, technology can help. With an online system to manage and track time-off, confusion about approvals, time-off balances and questions about what holidays are included in the policy are no longer an issue. In fact, this is one of the many reasons we created Kin. It was a problem for us before Kin existed, too.
When using an online platform to manage and track paid time-off, employers can have access to individual data as well as an idea of how much time the entire employee population is using. You’re also able to view how many people will be out—before you approve a requests—so you won’t be surprised when you’re the only one who shows up for work! Kin gives employers real-time data to follow-up with employees about any time-off related issues.
While federal law doesn’t require an employer to provide paid (or unpaid) time-off to employees on nationally-recognized holidays, that doesn’t mean small business owners shouldn’t offer this benefit. When employees can take time off away from work to celebrate, relax and enjoy time with family and friends, it has a positive impact on employee engagement. If you create a well-defined holiday time-off policy, use the policy to set clear expectations, and track the time off in an effective way with HR technology, you’ll experience the many benefits of offering your employees time off to observe holidays.