Time Off Policy Considerations For Small Businesses
Besides salary and medical insurance, vacation time is one of the most valuable incentives you can offer job candidates. There isn’t any legal requirement for you to give employees paid time off, but most workers consider this a basic necessity for any job. A generous time off policy does more than just show your commitment to promoting good work/life balance. It gives your employees time to recharge and return to work with a high level of productivity.
However, for many small businesses even having one or two employees away from the office can make it difficult to get everything done. This means you may have to balance your company’s needs against the satisfaction of your workforce. For some employers, that means delaying the onset of vacation privileges through a long probationary period. For others, it involves requiring workers to give as much notice as possible before taking time off. Allowing employees to take their days off in 4 hour increments is another option.
Alternatives
Many small businesses are turning away from traditional vacation and sick days to a paid time off (PTO) model. This entails reducing the total number of days off per year while allowing employees greater freedom in how they use this time. With a “PTO bank”, they can even gift their time off to other coworkers who need it. This works well in the tight knit team environment many smaller companies are able to achieve.
Does your company have a particularly slow time of year - say, Christmas to New Year’s? Consider simply shutting your doors for a couple of weeks. That’s hardly the most productive time of year anyway and most employees will enjoy having an extended period of time off. This will reduce the number of paid vacation days you will be expected to provide during the rest of the year.
Consistency
Whatever final decision you make regarding vacation/sick days or PTO, remember that unfairness is viewed as the cardinal sin. At a small company, everyone notices if someone isn’t at the office. It doesn’t matter if the missing employee is actually taking an unpaid day off.
When you have a worker who is constantly experiencing “emergencies” (other than those covered by intermittent FMLA), you need to address this as a time and attendance issue. Don’t make frequent exceptions to your time off rules. This will create resentment among your more reliable employees.
If you limit the number of days employees can accumulate, consistently encourage them to use their time off before they reach this cap. Depending on your business model, you may need to offer employees the choice to cash in their unused time. Just make sure you have a written policy regarding this option. Also, make it clear how accumulation of time is calculated and if/how unused PTO will be paid out upon termination.
