It’s a classic dilemma: What days off should your small business get or give? And furthermore, which of those days should be paid time off? As we know, mandated time off is limited. But there is a lot of variation among businesses and corporations when it comes to employees’ vacations, holidays, bereavement leave, and personal and sick leave. These kinds of benefits are an important part of your employee benefit package, and should be given careful consideration. What’s best for you and your employees might be very different from what’s best for another small business.
Bigger corporations tend to have set standards that have been adhered to for years. But when it comes to giving time off, small businesses have more freedom- and more responsibility. Every company’s needs are different. That’s why we’ve put together your complete guide to creating the perfect employee package for your business.
‘Tis the Season for Time Off: Holidays
Contrary to popular belief, businesses are not actually legally obligated to give employees time off for federal or state holidays. Depending on the nature of work, many companies require employees to work on Christmas, Easter, and other conventional holidays. Some examples of commonly observed traditional holidays are:
● Christmas Day
● Thanksgiving Day
● New Year’s Day
● Memorial Day
● Independence Day
● Labor Day
But businesses often take and/or give time off for other holidays as well, such as President’s Day, Dr. Martin Luther King, Jr. Day, Veteran’s Day, Good Friday, and Christmas and New Year’s Eve. There are also state holidays to consider, such as
If you’re asking yourself whether it’s ideal to give or take time off for major holidays, take into account the nature of your business. If you provide any type of 24-hour service, whether technical or in real time, you’ll likely need at least one staff member to be on call. Obviously, remote work may be more convenient for employees to do over the holidays; they can do it from the comfort of home, without the inconvenience of travel time, costs, and being away from family or friends.
If you work in an industry that requires communication with other businesses which may observe the holiday, such as public relations, it’s wise to give your employees the day off. (While you’re at it, take the day off yourself). Not much business can be done when many parties are unavailable. However, if the holidays are a big business time for you, as is the case with retail businesses, you’ll probably opt to stay open.
How can you motivate your employees to stay productive on a major holiday, when most people would rather be home celebrating? The traditional standard is to pay double time, or even time and a half on holidays. But in addition to this, try setting up a contest in which the reward is bigger than usual. This will give your employees the feeling of being treated to something special for the holidays- and rewarded for all their hard work.
If employees are required to come into a physical headquarters or location, try giving work a “party feel” for the day. Play cheerful music, wine and/or dine employees with a special brunch, or even do fun team-building activities that you think your employees will enjoy. Everyone could use a little extra motivation around the holidays- even if they’re getting paid double. If your business can afford it, give gifts that are small but unique and personalized. The holidays are an ideal time to find creative, thoughtful ways to show employees how grateful you are for their unique contributions.
Consistency is Key
If you’ll be in business on major holidays, try to give your employees ample notice that they’ll be working; this way, they’ll have time to schedule their plans around work responsibilities. And it’s a good idea to be consistent. For example, if you give employees off on Thanksgiving, do so every year. If you give more than one day off for a particular holiday, try to choose the same days every year. Consistency helps people know what to expect and plan accordingly. It also gives them a feeling of stability they can rely, which helps build company loyalty.
Be Culturally Sensitive
This is a big one. We live in a culturally diverse society. Some businesses give employees off for Christmas but don’t set aside any specific day to observe Hanukkah, which we don’t recommend. (We’ll talk a bit more about religious holidays in a moment). Employees want to feel valued not just for their productivity, but as individuals whose lives are important to employers. Of course, with all of the holidays celebrated in this country, it would be impossible to observe them all. As a small business owner, it’s your job to learn about your employees and which holidays are important to them and their families. Many times, these observations come naturally from working with people over time.
But if your business is new and you’re unsure, just ask. Conduct an employee survey, bring it up at a meeting, or even send an email inquiring about which holidays employees’ value most. Of course the information would be voluntarily; if employees prefer not to share, that’s their prerogative. But as a small business, you have an advantage here. Larger corporations would never be able to accommodate employees so personally, but you may be able to.
As we mentioned above, we are a diverse society. All cultures and religions are worthy of equal regard and respect. Many businesses are subject to anti-discrimination laws which must be adhered to stringently.
Time is Money: Paying Employees for the Holidays
As a business owner, you obviously have the choice whether to pay employees for holidays off. As a general rule, companies provide paid leave for the following major holidays:
● Christmas Day
● Thanksgiving Day
● New Year’s Day
● Independence Day
● Labor Day
● Memorial Day
Many businesses also give paid days off for other holidays as well:
● Christmas Eve
● Thanksgiving Eve
● New Year’s Eve
● Columbus Day
● President’s Day
● Dr. Martin Luther King, Jr. Day
● Veteran’s Day
● Good Friday
● Columbus Day
But depending on anti-discrimination laws and your unique staff, there may be several other paid holidays that require paid time off. If the employer fails or refuses to accommodate the religious needs of employees, and doing so would not cause undue hardship to the owner’s business, it is can be considered discrimination.
If you’re concerned about how to accommodate employees’ religious needs, especially if you have a large number of employees, you might allow individuals to use other eligible leave pay when observing religious holidays. (Just don’t cut into their sick pay, as this would be unfair). You can also give religious holidays as excused absences without pay, but try to be highly discriminating when making this decision. Religious holidays that are considered major within one’s religion or culture should be given the same regard and respect as traditional holidays.
You are not legally obligated to offer paid vacation time, but most full-time employees will only work for a company that grants them. Your employees’ productivity is largely dependent on their wellness and happiness; giving them enough time to take care of their personal needs, spend time with family, and maintain their health is vital. Still, when it comes to small businesses, vacations can be tricky. That’s mostly because small businesses are, well, smaller; they have less employees. So if one person goes on vacation, your operations and productivity could be seriously compromised. But don’t sweat it- setting up vacation time will simply take a little extra planning, forethought, and coordination.
How much vacation time should you give? Many companies base the length of vacation time on tenure. This is generally a good method because it incentivizes employees to grow with the company and continually improve. It also makes them feel valued and cared for. Milestones might be set anywhere from two to five to ten years. For example, you might offer 12 paid vacation days after one year of service, and add one additional vacation day per year up until 10 years.
While some companies designate paid leave all at once, we usually recommend that small businesses space it out. Giving employees the option to schedule their own vacation days within reason decreases the risk of being at a functional deficit for long periods of time. For example, let’s suppose you only have one employee to do a specific job. Without that person, it doesn’t get done- or at least doesn’t get done well. If that person is gone for a few days, it might not be too big of a problem. But imagine how far you could fall behind if that employee was gone for one week or longer. That’s why it’s so important to decide how much time your employees should reasonably take at once.
That isn’t to say you should prohibit employees from taking all of their vacation days at once. In fact, for businesses, doing so makes planning much easier. But no matter what, it’s important to plan carefully before giving days off. If you know that one season is particularly busy or demanding for your business, limit the number of vacation days employees can use at one time. You can also limit the amount of vacation days that can be taken at once all year around. The ball is really in your court.
Allowing employees to space out their vacation days at their discretion allows them to take vacation more spontaneously. This could leave less time for planning, so you may want to require employees to request days off two to three weeks in advance. (This is barring genuine emergencies, of course). And if you allow employees more spontaneity with vacation time, they may be less likely to take long vacations. Be sure to review federal laws and payroll concerns before deciding on vacation policies.
Again, Consistency is the Best Policy!
As with holiday policies, vacation policies should also be consistent all year around. When you decide how much time in advance employees need to request vacation days, don’t change the policy later. If it’s two weeks in advance, it’s two weeks in advance- no exceptions.
Also, decide how whether employees need to make oral or written requests. We recommend requiring them to recording requests on paper or in a digital system. It’s just easier to keep track of things. To whom the request is to be made should also be clear; different companies designate different people to handle vacations. Usually, it’s not always guaranteed that request for vacation time will be granted as requested. Sometimes you’ll need to compromise for the best interests of the business, and that’s perfectly okay. Just be sure that your employees are made aware of this fact at the start of employment.
Handling Sick Leave and Disability
You may be surprised to learn that paid sick leave and personal time off is not usually required by law. (Unpaid sick leave is another story; it can be subject to federal or state family and medical leave laws). But although not legally required, paid sick leave is extremely important and valuable to employees. Getting sick or experiencing a family emergency is out of employees’ control; if it causes them to fall behind with work and pay, it affects every other area of their life negatively- including their productivity and ability to do valuable work.
You should establish a fixed number of sick days to offer employees. However, these may be subject to the circumstances at your discretion. Of course, discretion must be unbiased and fairly applicable to everyone. Otherwise, you are in violation of discrimination laws, and could be charged. Also, you’ll need to establish whether unused sick days can be carried over to the year. It’s all part of the policy-making process. Speaking of which…
Unfortunately for those who don’t like grunt work (which most of us don’t), it’s up to you to establish your own sick leave policy. Document what constitutes an illness or emergency; whether the policy extends to an immediate family’s illness or emergency; and whom should be contacted in case of illness or emergency.
It’s also advisable to offer some form of disability insurance in the event that an employee becomes temporarily disabled. Employees gravitate toward companies that make them feel secure and valued.
What is Personal Leave?
Personal leave is time off to cover circumstances that are not covered under sick leave, bereavement, or other established policies. For example, moving from one home to another is a situation that might require personal leave. Most companies offer much less personal time than sick leave time. The number of personal days allotted to each employee does not vary with tenure; in the interest of fairness, everyone is given an equal amount. You get to decide whether personal time is paid or simply excused.
What is Bereavement Leave?
Bereavement leave is time off for employees to observe a funeral for the death of a loved one. While it is not required by law, companies who offer bereavement leave generally give employees between two to four days per funeral. This way, employees have time to spend with family and take care of other responsibilities related to the death. If you don’t provide funeral leave, you have the option of allowing employees to use sick or personal time in the event of a death. As with all other leaves, be sure to create a written policy regarding bereavement leave.
It would be impossible to cover all aspects of scheduling time off for a small business. But if you consider these guidelines when creating and implementing your policies, you’ll be off to an excellent start.