Vacation Policy

Keep your employees motivated with a fair vacation policy benefit

With higher operating costs, some businesses have eliminated benefits such as a vacation policy. However, businesses should strive to keep as many of these benefits as they possibly can. Employee productivity directly relates to how secure they feel, and your employees especially want their hard work and dedication to be acknowledged and rewarded. Vacation benefits allow employees to feel that if they have an emergency at home or just need a rest to recharge their batteries, that they can take vacation time off without fear of recrimination. Employees also feel appreciated when they get paid time off. Adopting a vacation policy makes good business sense.

Businesses do have much latitude in what type of vacation policy to offer. Standard vacation options include offering a fixed number of vacation days per years worked, cashing out un-used vacation and offering different numbers of vacation days depending on job classification. Businesses can provide such benefits without creating a financial burden on the company.

Consider implementing a vacation standard:

1. Study laws and standards pertaining to vacation benefits.

2. Consider options such as vacation time pay and vacation perks for employees.

3. Develop a plan for implementing your own vacation policy. 4. Provide each employee with a handbook that outlines company policies and benefits – then stick to the policy you establish.

Explore vacation policy standards to see what limitations and obligations you have to your employees

In general, federal and state laws do not require businesses to offer vacation leave or vacation pay. However, certain circumstances do warrant some type of paid leave. And when companies do offer vacation practices state laws enforce company's policies in cases of claims by employees.
U.S. Department of Labor does not require businesses to offer vacation leave to their employers. However, their website describes certain cases with federal contracts with private business in which the company must provide vacation pay. Cornell University Law School compiles links to each state's labor and industry laws. Similar to federal law, many states also do not require a business to offer a vacation policy. This website provides quick links to check the laws in your state.

Evaluate available tools to set a vacation policy for your company

Many companies specialize in helping others to operate a successful business. Some provide templates for you to document your policy statement. Others provide services to help you initiate a workable vacation solution.

Implement a standard vacation policy within your company

Establish the policy through your human resources department and designate personnel inside your company to administer the policy. Document the policy in an official policy statement. Establish a process for interpreting the policy consistently and putting it into effect. The most important human resource management function is to provide each employee with a written employee handbook, or at least the company's vacation policy. Include information on issues that might arise, including unused vacation, vacation perks, vacation pay, length of vacation, any attendance requirements and accrual policy. Adhere diligently to the policy so your employees have no reason to file a grievance or create dissension within your workforce.
  • If businesses choose to offer vacation time, enforcement of the vacation policy can become a legal issue. For example, if an employee takes a day off, expecting payment and doesn't get it, that employee can take legal action to ensure the company follows its own policy. Because of this, it becomes very important for your business to have its policy in writing.

Trusted Vendors