3 Tips for Equitable PTO Policies

Giving your team ample time off to recharge and reset is absolutely critical to morale and productivity. At a small or medium-sized business, it’s especially important to ensure that paid time off policies are fair to everyone on the team, and make sure adequate staff is in the office at all times. With everyone on a small or medium-sized team out of the office for a holiday, productivity can slow or even stop. If you’re trying to balance your employees’ vacations with the demands of your business, apply these strategies to keep paid time off fair and equitable to everyone.

1. Take Requests in Advance

By asking each employee to work a set number of holidays, and allowing everyone to choose at the beginning of the year, you empower your employees to plan their celebrations in advance around the needs of the team.

One of the easiest and most efficient ways to manage when everyone wants to take time off is to require that requests for paid time off be submitted in advance. Establish a time off request policy that allows people flexibility in case unexpected things come up, but also gives managers the foreknowledge to plan and schedule. This could mean requests need to be submitted anywhere from two to six weeks in advance, depending on your business.

It’s also advisable to establish specifics like how many people from each department or each tier of management can be gone at one time in a written policy. You can make the PTO calendar public so everyone in the office or department can always see who will be gone when, and plan time off as a community to ensure everyone gets what they need.

2. Seniority Counts, But Isn’t King

No matter how cordial the department and public the calendar, sometimes during the summer, everyone wants to be out at once. Seasonal holidays like Father’s Day and Independence Day mean plans with loved ones that might mean people go out of town. When it gets close to back-to-school time, parents might want time off to have a few more fun days with the kids.

In any of these cases where a conflict arises between two essential employees who both want the same days off, you may consider simply settling the issue based on seniority. However, if the senior employee has already had more time off than the junior one, you may need to make a different judgment call. It’s important for employers to know that a recent study by HR experts TriNet found that lower-salaried employees are less likely to take time off for pleasure, and more likely to take time off for personal obligations and family emergencies.1 That means why each employee is requesting time off can also be an important factor. Seniority should count, but don’t let it dominate the PTO policy.

Tip for Equitable PTO Policies

3. Establish a Required Holiday Policy

Many workplaces that need to stay open on public holidays year-round establish a rotating schedule that requires everyone on the team work an equal number of holidays. Agencies like hospitals or other businesses that can’t or don’t close for holidays often divide these days into lists of “major” and “minor” holidays to ensure everyone gets to have certain special days off. Major holidays are days like New Years, Easter, Independence Day, Thanksgiving, and Christmas, when banks and most businesses are closed. Minor days are days like President’s Day, Memorial Day weekend, and Veterans Day, when government offices close but private businesses are often open. 2

Establish a time off request policy that allows people flexibility in case unexpected things come up, but also gives managers the foreknowledge to plan and schedule.

By asking each employee to work a set number of holidays, and allowing everyone to choose at the same time, you empower your employees to plan their celebrations in advance around the needs of the team. The Fair Labor Standards Act doesn’t require that employers pay their employees for any time they spend not working, even on a major holiday.3 Still, when employees work on observed holidays, even if they’re required to work by company policy, most employers offer some sort of additional compensation for their time. This could mean they make extra wages over their normal hourly rate, or accrue additional PTO for the hours they work on the holiday.

Ensuring an equitable PTO policy for your small business is essential to keep employees feeling satisfied, respected, and fulfilled in their roles. Even in situations where someone has to work a day they didn’t want to, a fair policy will ensure they understand why. Additional pay and other incentives to work holidays will make missing out on the celebrations less frustrating to workers. And keeping the calendar public will empower managers to notice who isn’t taking enough time off to preserve their efficiency. A study by Project Time Off found that 42% of workers don’t use all their paid time off. The most equitable PTO policy of all is one that guarantees everyone gets the time to do the things they care about.