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Your Vacation Policy

In an earlier blog I discussed hiring minors for summer employment. Now let’s talk about your vacation policy.

As a business owner and employer, you have no legal obligation to offer vacation to your employees. However, full-time employees and many part-time employees expect that benefit. When you decide on how much vacation time to offer and how to handle requests, you should think strategically: what are you trying to accomplish by offering this benefit and how will it affect your company?

For example, are you planning to award employees for longevity by increasing the amount of vacation over time (two weeks for the first year, three weeks after five years, etc.)? Or would it suit your business model better if everyone has the same two weeks off at the same (slow) time of year?

Vacation time is part of your company’s overhead; your short- and long-term finances are affected when employees use or don’t use their vacation time. Does unused vacation time roll over from year to year or do employees lose what they don’t use? Is there a limit to the number of days or hours that can be rolled over? What happens to those rollover hours if the employee quits or is fired?

The vacation schedule affects your staffing. You want to choose a method of scheduling that prevents shortages and requires overtime hours to make up the difference. You also want to make sure that staff is available at your busiest times and that conflicts over who gets what dates are minimized.

You may want to involve your current employees in setting up your policy to see what type of vacation schedule/process they would find most rewarding. For example, do they want vacation and sick time to be part of one paid time off package or would they like to keep sick time separate? Would they like an online scheduling tool that all employees can access to schedule their own vacations based on the days still available? You should provide a “don’t care” option in any survey, because that will help increase the number of employees who agree with the final decision.

HR Compliance 101 helps new businesses set up and established businesses revise their vacation policies to fit the needs of the company, the owner and the employees. Call us today.

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