Time Off Basics
Most employers offer some sort of paid time off (PTO) for employees. Although paid holidays, vacation or personal days are a common (and expected) employee benefit, you should carefully consider the cost and impact to your business when establishing the rules.
Companies usually tie PTO benefits to the employee’s length of service. For example, employees may be given two weeks of PTO per year until their fifth year, when they are then given three weeks per year. There are no federal laws requiring employers to grant PTO, so you can create whatever policy works best for your business.
When crafting your PTO plan, consider these additional factors:
- Accruals: Are employees given all PTO automatically on January 1, or do they earn PTO for every hour or week they work?
- Rollovers: Can employees roll over PTO each year? If so, how much can be rolled over?
- Banks: How much PTO can employees save up to use each time? How many rollover hours can be banked?
- Part-time vs full-time: Do these benefits differ for part-time employees?
- Blackout periods: Are there any times of the year when employees can’t use PTO?
- Request procedure: How can employees use their time off? What is the approval process?
- Unused days: When employment ends, are employees paid for unused PTO?
Some of these may be affected by your state and local laws, so make sure you’re aware of and compliant with any applicable regulations in your area.
Aside from PTO, your business can also offer paid holidays. Again, there are no laws requiring businesses to close on specific days, but many companies opt to close on:
- New Year’s Day
- Memorial Day
- Fourth of July
- Labor Day
- Thanksgiving (and the following Friday)
If any of these holidays fall on a weekend, businesses often close on the preceding Friday or following Monday. Other common paid holidays include Martin Luther King, Jr. Day; Presidents’ Day, Veterans Day and Columbus Day.
Aside from the Family and Medical Leave Act (FMLA), there are no federal legal requirements for paid sick leave. At the local level, however, the push for paid sick leave is gaining in popularity. Several cities and states have already adopted paid sick leave laws, which, unlike the FMLA, often cover minor illnesses or routine medical appointments. Employers in these locations are now faced with creating their own paid sick leave policies.
At a minimum, sick leave policies should include:
- Accruals: Consider how you’ll capture accrued sick time, including any differences between part-time and full-time employees. How much sick leave can employees accrue and roll over?
- Requests: Outline how employees can request to use sick leave and how much notice they should provide. Whom should employees contact? Can sick leave be used just for personal illness or can employees use this time to care for dependents?
- Documentation: As long as the policy doesn’t violate the FMLA or local laws, you have the right to request medical documentation. Will every day of sick leave require this documentation, or do employees only need to provide this if they’ve been out for several days? What kinds of documentation will you accept?
- Tracking: To avoid employee abuse, it’s important to keep track of how employees are using sick leave. How will you monitor this time off?
Sick leave laws vary widely by location, so make sure you know your obligations. Also, if your business has offices or employees in different locations, you may need to create separate policies for each location.
A Matter of Faith: Employee Absenteeism and Religious Practice
Dealing with religious practice at work is tricky: While you may recognize that many of your employees identify with a religious group, accommodating religious practices can be difficult, especially if that accommodation involves time off. Although there are many ways to address religious practice and employee absenteeism, a few basic considerations will help you create a fair employee attendance policy.
The legal obligation to accommodate
Under Title VII of the U.S. Civil Rights Act of 1964, you must reasonably accommodate employees’ sincerely held religious beliefs or practices, unless doing so would create an “undue hardship” for your business.
Flexible scheduling, voluntary substitutions or swaps, job reassignments, lateral transfers and modifying workplace practices, policies and/or procedures are all ways to accommodate an employee’s religious beliefs.
You can typically establish “undue hardship” if accommodating an employee’s religious practices:
- Requires significantly more funds than ordinary administrative costs
- Hurts efficiency in other jobs
- Impacts other employees’ job rights or benefits
- Impairs workplace safety
- Causes coworkers to carry the accommodated employee’s share of potentially hazardous or burdensome work
- Conflicts with another law or regulation
A designation of “undue hardship” should be determined on a case-by-case basis for each employee and absence.
If an employee asks for time off for something related to a sincerely held religious belief (e.g., to attend a religious service, to observe a religious holiday or not to work certain days of the week), or asks for a reasonable exception to your dress code, break times or other policies, try to find a way to accommodate the request, if possible. And if the employee’s suggested accommodation would cause an undue hardship, work together to come up with a more reasonable accommodation.
The most common paid holidays in the U.S. include both civic and religious days that most of the population celebrates – but what if employees don’t celebrate those holidays? Your office may offer a paid holiday on Christmas, but Jewish employees may want to take time off for their religious holidays, like Yom Kippur, Rosh Hashanah or Passover. Offering floating holidays can help you easily accommodate those requests for time off.
A floating holiday is a paid day off that doesn’t take time away from PTO or sick leave banks, which allows employees to celebrate religious or cultural events without needing to take personal leave.
Employees who don’t need time off for religious or cultural activities often use floating holidays for other special days, such as birthdays, anniversaries or parent-teacher days.
Before offering floating holidays, you need to create a policy that outlines:
- When employees can take floating holidays: Make sure employees know about any times when floating holidays can’t be used. Before deciding on blackout dates, consult with multiple calendars to ensure these dates don’t overlap with any important religious or cultural holidays.
- Accruing and rolling over floating holidays: Employees can either start each year with the floating holidays or earn them with time. If your company offers two floating holidays, consider giving employees one every six months. Determine if employees can bank and carry these days over into the next year or whether the unused time should be paid out at the end of the year instead.
Civic Duty Policies
Most employers know the value of serving on juries, acting as witnesses in criminal and civil trials, and voting in elections. But as a business owner or manager, you may not understand your legal obligations when it comes to employees participating in the legal system or an election.
Many state and local laws require paid time off for these specific employee absences, so make sure you know what’s required in your area before drafting a company policy.
If no laws state otherwise, you do not have to pay hourly employees for time off work spent responding to a summons, voting or serving on a jury. Salaried employees should receive their regular weekly salary if they performed any work during the workweek when serving on jury duty. Employers are, however, still permitted to deduct time from a salaried employee’s leave balance, even in partial-day increments.
It is generally illegal to terminate or otherwise discriminate against an employee for fulfilling jury duty obligations or taking time off to vote. Many states also prohibit discrimination against employees who miss work to participate in judicial proceedings as a witness or victim, especially in cases involving domestic violence. If no state or local law applies, you can develop your own rules for handling these types of leave.
This special type of employee absenteeism cannot be combined with other employee absences to justify firing an employee. Make sure whatever tools you use for tracking employee absences allow you to treat these missed hours or days differently.
Be certain you understand and consistently enforce your own employee attendance rules for jury duty, voting and court proceedings leave. Your business policies, along with state and local laws, will dictate whether time off for this type of employee absence is paid or unpaid, whether employees are required to provide documentation (e.g., proof of jury duty service or a witness subpoena) and whether employees are permitted, or required, to use PTO.
There are few things more difficult for a manager than dealing with grieving employees. Whether they’ve lost a parent, spouse, partner or child, employees who have said good-bye to someone precious will struggle with work-related issues as they deal with their loss. Managers need to be sensitive about decisions to let coworkers know about the loss, when and how to keep in touch with employees while they are out, whether to send food, flowers or another expression of sympathy, and whether to attend the funeral or send another employee to represent the business.
You will also need to deal with the concept of bereavement leave. Funeral leave is not mandated by federal law, but may be required by your state, or by a company policy or tradition. It’s better to create a policy before an employee needs to use this kind of leave. As part of that policy, you should consider:
- Existing state and local laws: Are there any state or local laws on funeral leave as a special or protected kind of employee absence?
- Employee eligibility requirements: Is funeral leave available for all employees, only full-time employees, or only certain categories of employees? Also, can employees use this benefit at any time or only after a certain length of service?
- Paid or unpaid: Is this kind of employee absence paid or unpaid? Are employees permitted (or required) to use other PTO for the absence?
- Duration of leave: What is the duration of standard funeral leave? Does it vary by relationship level (i.e. more for a child or parent than a member of the extended family)?
- Relationship: Must the deceased be an “immediate family member”? If so, how is that term defined?
- Verification: Is verification of the reason for the employee’s absence is required and, if so, which forms of verification are acceptable? Is documentation that a terminal family member’s death is imminent enough to trigger bereavement leave, even if the family member has not yet passed away?
- Out-of-state funerals: Is there a way to deal with funerals that are far from the employee’s home, where travel time might use up the entire standard leave?
When developing funeral leave policies, keep in mind that requirements like notice or filling out advance requests for employee leave are not reasonable in this circumstance.
Do You Know Your State and Local Rules for Managing Employee Attendance?
Beyond the various federal labor laws that specify how U.S. employers handle certain employee absences, many states and cities grant additional rights and protections to employees who miss work. The rules tend to be more employee-friendly at this level, so it’s important to be familiar with every employee attendance law that affects your business.
State and local employee absence laws tend to be modeled after federal laws, such as the FMLA, the Americans with Disabilities Act (ADA) and the Uniformed Services Employment and Reemployment Rights Act (USERRA). But again, they typically extend rights and protections beyond what the federal laws require.
In some locations, employees may be granted longer periods of leave time, paid leave, or they may be allowed to take leave for additional reasons. While some federal regulations (such as FMLA) impact only larger employers, state and local labor laws often apply to smaller employers as well.
Some state and local laws also allow employees to take job-protected leave for reasons other than military service or medical issues. These laws – also known as “small necessity” leave laws – vary on how much time off an employer must allow, whether the time off is paid or unpaid, and whether the employee’s job must be held until he or she returns.
Small necessity leave laws cover activities like:
- Attending a child’s school-related activities
- Treating or recovering from a workers’ compensation injury
- Serving on a jury or as a witness in a trial
- Donating an organ, blood or bone marrow
- Volunteering as a firefighter, paramedic or certified disaster service volunteer for the American Red Cross
- Attending a judicial proceeding when the employee or a family member has been the victim of a crime
- Voting in an election
To stay compliant with all laws and regulations, be sure to check local regulations that apply to your business before you deny an employee time off from work, dock employee pay, or discipline or fire an employee for absenteeism. You’ll also want to make sure you cover these topics in your written employee attendance policy or employee handbook, updating policies whenever the laws change.
Handling Your Staff’s Requests for Time Off
For all the time and energy you spend monitoring your staff’s time and productivity while at work, there’s the equally pressing issue of managing their time off. How can you create a fair and consistent approach to handling employee PTO and avoid scheduling conflicts?
Follow these three steps to simplify your scheduling process, prevent overlaps and keep conflicts and complaints to a minimum:
- Start with a Clear PTO Policy
- First things first: You need a written policy that clearly communicates your company’s time-off benefits. This policy should cover:
- The amount of PTO an employee earns each year, how it accrues and how much unused time can be carried over from year to year
- How much notice you require for time-off requests
- The procedure for requesting time off
- How conflicting requests are prioritized (by seniority or “first come, first served,” for example)
- Any other details, such as how much time can be taken at once or any blackout periods due to business demands
- Build an Efficient Request Process
- The easiest way to keep conflicts to a minimum is to require employees to request time off in writing, as far in advance as possible. That way, you can make better decisions about workflow scheduling and staffing. Plus, if your decision to deny a request is ever questioned, you’ll have proper documentation to back up your decision. Let your staff know the deadlines for asking time off – especially during busy work periods. If necessary, set blackout dates or specify how many employees can request off a particular day.
- Exercise Your Right to Approve or Deny
- Even with a well-drafted PTO policy and employee time tracking in place, you’re bound to face some scheduling conflicts. If approving a request would hurt your business or throw a particular department into a tailspin, you should encourage the employee to reschedule the vacation for a later, more convenient date.
Always be certain you have a legitimate business reason for turning down a request, especially for employees who have followed the proper procedures. If you’ve communicated policy and process upfront with every employee and new hire, you’re much less likely to be accused of “playing favorites” with time-off requests.