Do you give your employees unpaid time off? Or, do you pay vacation time and throw in a yearly bonus?
Maybe you offer floating holidays or the standard two weeks of vacation time and eight fixed holidays. Whatever your policy looks like, it probably has its share of advantages and drawbacks.
However, if you find more and more employees complaining about your time-off policy, it might be time to give it a modern update.
With fierce competition for talent, an incredibly diverse workforce and a shifting legislative landscape, many companies are rethinking their time-off policies. In 2017, nearly one-third of all organizations increased their benefits, including time off.
New, more flexible arrangements allow employees to find a better work-life balance, keeping them more engaged with and committed to their company. How, though, do you decide which policies are fair?
What Makes a Policy Fair?
Creating a fair time-off policy will do more than making people happy. It will establish clear guidelines, foster an inclusive culture and work in both your company’s and employees’ interests. Ideally, there should be a healthy mix of unpaid and paid time off (PTO).
For instance, some employers may give their workers a few weeks of PTO and, after that time is gone, the workers can request unpaid time off.
Some employers, however, give their employees unlimited PTO. While some supervisors may worry workers will abuse their PTO, this is not the case in most situations. Out of all the employees who receive PTO, only 35% use all of it. On average, workers left five days of their PTO unused in 2017.
When PTO is unlimited, employees often take less time off compared to traditional plans. However, to secure this benefit, employers must set an example from the top down. This form of practicing what you preach is ultimately what makes a policy fair. If you, as an employer, create a policy you would be willing to comply with, odds are your employees won’t mind the following suit. So what do the most popular time-off policies look like? And how can you make your own fairer?
1) Vacation Time
Roughly 98% of American businesses offer some paid vacation to full-time employees at an average length of 15 days. In this program, employers allot their workers a specific number of days for vacation time per year based on the length of the worker’s employment. A typical vacation policy will explain the rules regarding how and when employees can take their vacation days and whether unused days will carry over to the following year.
To make your vacation policy fairer, you may consider offering the same amount of vacation time to every employee, no matter how long they’ve worked for you or their position in the company. Or, you might join the few who provide unlimited paid vacation time. Most employees will be unlikely to abuse their PTO and may even take less time off than they would if you offered a set number of days per year. Additionally, you should allow yourself the same number of vacation days you provide to your workers.
2) Sick Leave
Like vacation days, sick days are typically determined by the length of time an employee has worked for a company. On average, workers receive seven sick days per year at one year of service. The main differences between vacation time and sick days, however, are that sick days don’t generally carry over into the following year, and they don’t increase much with time.
Moreover, more than half of employees use these PTO sick days as mental health days. Yet, one in five misled their employer as to why they were taking the day off — which may suggest the employees weren’t aware of their company’s PTO policy when it came to mental health sick days. To ensure your workers are honest and get the time off they truly need, consider publicizing your policy in an email or meeting to make everyone aware.
Today, many companies offer several paid holidays to full-time workers, including New Year’s Day, Thanksgiving, Christmas Day and Labor Day. Some businesses also grant paid days on Memorial Day and Columbus Day. Most require their employees to take personal PTO to observe other religious holidays. However, just a quarter of employees say they are happy with their company’s holiday policies. Thus, employers may want to rethink their holiday policy to make it more inclusive.
One way you might create an inclusive holiday schedule is by moving to a time-off distribution system, allowing employees to choose their own paid holidays. So, if they wish to work on Christmas Day or New Year’s, they may do so. If they want to use a paid holiday to celebrate Christmas Eve or Rosh Hashanah instead, they can. This policy update can help to make workers feel more comfortable, included and appreciative of their benefits packages.
Employees typically receive paid bereavement leave when a close family member or friend passes away. Workers may use this time to make arrangements, attend the funeral and grieve. The number of days you offer is generally up to your discretion as most employees won’t require many of these days per year — if any.
When creating your policy, consider how much time you would personally take off to grieve a loved one or make preparations. Then, use that estimate to create a policy. Be explicit with the number of days you offer to your employees and whether you require proof of the death. For instance, you may ask your employees to bring in an obituary or funeral program to ensure they use their bereavement PTO wisely and not abuse it.
5) Parental Leave
Roughly 70% of workers say paid maternity leave is an integral part of a benefits package, and 56% say the same of paid paternity leave.
Employees use this time to care for newborn babies and children. However, 31% say they don’t receive any paid parental leave. Thus, parents may be forced to use their personal paid vacation days or sick days to care for their newborn or simply take unpaid leave. This may put extra stress on the parents who are already worrying over their newest member of the family.
To make parental leave fairer, you may consider increasing the amount of time off you are willing to pay for. Typically, new mothers take 12 weeks off. Even if you can’t give them full pay while they are on leave, you may be able to offer them half-pay just to keep them afloat until they return to work. If your business is smaller and can’t afford to provide PTO for new parents right now, make it a priority for the future.
6) Jury Duty
If the state summons your employees to serve on jury duty, you may offer to pay for their time spent serving, especially if your state has jury duty pay laws. Additionally, employers must allow time off for employees who must serve as a witness in court proceedings in states like Pennsylvania and Maryland. To ensure your employees are, in fact, serving, you may require they show proof of their summons. This requirement is especially important if you are offering them PTO for serving.
To make sure your policy is fair, keep informed of your state’s law and all the details surrounding it. For instance, some state legislation protects prospective jurors by preventing their managers from denying them their benefits because of jury duty. Moreover, some states prohibit you from requesting your employees to work overtime to make up for time spent serving on a jury.
7) Voting Time
Last year, 44% of companies offered employees PTO to vote in local and federal elections. Generally, this PTO is limited, as workers need only a few hours to cast their votes. Many states do have laws requiring employers to provide some voting leave benefits, whether it be paid or unpaid. However, some states also require employees to notify you in advance if they plan to vote during office hours.
Of course, you want your employees to be able to vote during elections, and there are numerous ways to help them do so. If you’re a smaller company, you might suggest your workers participate in absentee or early voting so that they can still work on election day. If your company is larger, you may offer PTO if your employees notify you of their intentions in advance.
Factors to Consider When Crafting a PTO Policy
In addition to state and federal legislation, the size of your business and workforce and your personal thoughts, you’ll want to consider a few other aspects when creating your business’ time-off policy. For instance, if you’re beginning to rethink your PTO policy, you might also want to update your benefits package — which includes a 401k, life insurance, and medical insurance. Maybe you can offer more PTO in exchange for less health coverage.
Moreover, you should consider how much time your employees typically request off. If they don’t take time off often, you may consider offering unlimited PTO or more vacation time, knowing they probably won’t abuse this privilege.
Consider their demographics, as well. If you mostly employ younger individuals, they may prefer flexible PTO so that they choose their own holidays. On the other hand, an older workforce may value a fixed amount of vacation and sick days.
As always, the key to crafting a fair time-off policy is to do unto others as you would have them do unto you.
So, if you would take three or so days to grieve the death of a loved one, allow your employees the same choice.
Also, ask for employee feedback regarding your current policy and take their suggestions to heart. If you sincerely value your workers, you’ll be willing to work with them to create a system that favors both them and your business as a whole.