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‘Tis the Season to Give the Gift of PTO: Vacation Policies for Your Small Business

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Brian Leimone

Love the idea of letting all of your employees go home for the holidays? One perk of having a small business can be having the flexibility to close up shop for a company-wide holiday vacation, but this can only work if your whole team is on board and willing to put in the work beforehand.

And of course, depending on your unique business needs, giving everyone time off at once might not be a feasible plan, but you’ll still need to have policies in place to ensure your business continues to run smoothly as the holidays approach. Even if you keep your business open year-round, you’re sure to get more frequent vacation requests as the holidays get closer.  Here are a few tips for drafting your own company’s holiday and paid-time-off policy.

Know what you’re required to offer.

Did you know you aren’t legally required to offer holiday pay? The Federal Fair Labor Standards Act only requires that employees be paid for time worked, meaning that you aren’t required to provide PTO for holidays, religious observances, vacation, sick days, etc. However, you should offer these benefits, as in the end, happy, healthy employees pay off more than holding on to that PTO. Here’s how:

  • Reduced employee absenteeism

  • Higher morale

  • Greater productivity when employees are working

  • Healthier, less stressed employees

Having a competitive time-off policy will help you retain and attract more productive, talented, and dedicated employees. You just need to figure out what that means for your business.

Decide what you’re willing and able to offer.

Sure, some businesses offer unlimited paid-time-off, but this might not be a feasible model for your business. Some companies offer paid-time-off without differentiating between vacation, sick, and personal days, while others choose to enforce different policies around each. For example, you might decide to offer 10 paid days off to be used at each employee’s discretion. Alternatively, you can offer a specific number of days for various reasons:

  • Paid vacation days

  • Personal days

  • Sick days

  • Designated holidays

As a small business owner, it’s up to you to decide how you’d like to offer PTO. Discuss the pros and cons of each option with your human resources personnel to see what works best for your business. Offering a set number of categorized days allows you to more easily track how much sick time your employees use on average in comparison to personal days or vacation days. However, allotting a certain number of days per each category makes it more difficult to encourage a healthy work-life balance for your employees. You may have employees who need more sick days or family days than other members of your team, while some may not require all of their allotted sick days and would appreciate having more vacation time.

Days vs. Hours

If you choose to implement a more flexible PTO policy, you’ll need to decide if you give employees a set number of days or hours. Granting PTO by hour allows employees to take advantage of their PTO in smaller, more flexible increments to handle appointments, childcare emergencies, illness, etc.

Choose which company-wide holidays your employees will receive.

Again, you aren’t technically required to offer any holidays, but if you want employees who are dedicated, healthy, and productive, it’s important to offer at least a few popular holidays off. Below are the holidays that most employers offer all of their employees with the percentages of U.S. companies who close for each holiday.

  • New Year’s Day (January 1st) – 95%

  • Memorial Day (3rd Monday in May) – 94%

  • Independence Day (July 4th) – 76%

  • Labor Day (1st Monday in September) – 95%

  • Thanksgiving Day (4th Thursday in November) – 97%

  • Christmas Day (December 25th) – 97%

To spread more holidays throughout the year, you might also choose to offer some or all of the following:

  • Martin Luther King Jr Day (3rd Monday in January)

  • President’s Day (3rd Monday in February)

  • Columbus Day (2nd Monday in October)

  • Veterans Day (November 11)

  • Day After Thanksgiving

  • Christmas Eve (½ day or full day)

For more on choosing which holidays to grant your employees, see the Society of Human Resource Management.

Preparing to Take Time Off as a Company

Once you’ve established which holidays your company will observe, you’ll need to clearly communicate your expectations to your team. If you’re closing up shop for a day or a week, you’ll need to get ahead of the game. Set up systems to ensure your team runs like a well-oiled machine so they can truly sit back and relax during their time off. Prepping for the holidays will look different for every business. Some common measures include:

  • Updating your business hours online (don’t forget Google My Business!)

  • Getting ahead of schedule on deliverables

  • Restocking on the necessities so you’re ready to hit the ground running when you come back from vacation

  • Setting an away message on company email accounts and phone systems

On top of updating your holiday hours, email signatures, and voicemails, make sure you’re advertising any changes to your business hours on your website. Sprucing up your website and ensuring that it’s optimized and user-friendly before the holiday rush is imperative to successfully getting through the holiday season without any hiccups.

See if your website measures up and help your business thrive with: 3 Ways Inbound Marketing is Changing Website Design.

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