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The Complete Payroll Blog

How to Set Policies for Time Off Requests

Posted by Complete Payroll | Aug 16, 2018 7:00:00 AM

How to Set Policies for Time Off Requests - Complete Payroll

When you begin to hire employees for your business, you’ll begin to encounter requests for time off. This is true even if you don’t offer paid time off as a benefit; most people will eventually want or need time off for holidays, medical appointments, vacations, or to manage responsibilities in their personal lives.

In order to avoid problems down the road, you’ll need to set policies as soon as possible, and ideally before you take on your first employee. It’s much easier to begin with a so-so policy in place that eventually needs to be tweaked than it is to try and implement a brand new policy after a period of time when anything goes.

Here are some things to consider when thinking about time off request policies.

Limited or unlimited time off?

Traditionally, employees are given a certain number of hours of time off. If they have ten paid vacation days per year, they can request up to ten vacation days per year. Employees might be permitted to roll some of these hours over to the next year, or they might not.

Timekeeping Compliance Checklist

Lately, there has been a trend of employers offering unlimited paid time off, with the understanding that, so long as the work gets done, the particular number of days off is of less concern. This practice has come under critique for actually discouraging employees from using their time off, since making use of these unlimited days is often used against employees when it comes to evaluations, raises, and promotions. Regardless, this is something you’ll need to consider in advance.

Accrual or batch hours?

If you choose to offer a certain number of days off, you’ll need to decide how these are distributed. The most common option is for employees to accrue a certain amount of time off based on how many days or hours they’ve worked.

An employee hired in October might eventually have enough time off accrued to take a week off around New Year, but because they haven’t yet accrued enough time, it’s likely they’ll only be able to take a day or two. If you choose this option, organized and accurate timekeeping is critical.

The other option is to provide a batch of hours upfront: everyone gets X number of hours on a certain date (or upon hire) and how they allocate those hours is up to them. This option can make more sense if your employees only have unpaid time off, so that you don’t find yourself having to pay a leaving employee for a full year of unclaimed PTO when they’ve only been working there for a few weeks.

What types of time off?

Some employers have employees accrue all types of time off in a single pot. Others split the difference between vacation time (which must be scheduled and approved in advance) and sick time (which doesn’t).

Others have different policies for paid and unpaid time off requests, time off for educational reasons, time off for community service, or other categories. How you divvy it up depends on your needs and priorities as a company.

Other limitations

You can certainly place restrictions on time-off requests. Examples of these can include:

  • Time off is not permitted in the first 60 days after hire.
  • Time off is not permitted during [a particularly busy time, such as tax season or major events].
  • A maximum of two people per team can schedule the same day off except during slow periods.
  • Supervisors and their deputies or substitutes cannot schedule the same day off.

If you do have limitations on who or how many people can schedule a given day off, you’ll need to tackle how those decisions are made. First come, first serve? By seniority? By lottery? On a rotating basis (Nina worked Thanksgiving, so she gets priority at Christmas)?

Do not put off making these decisions until later, because it is very easy for a lack of transparency and consistency in this area to lead to plummeting morale and high levels of attrition.

Special considerations

There are certain types of time off requests that should be treated with special consideration. Military service members need to be permitted time off to serve or drill as needed. FMLA may require that you allow an employee time off to manage health concerns.

Employees who are required to abstain from work on certain religious holidays may seek an accommodation, whether this is time off or a change in shift. This type of religious accommodation is covered by the EEOC.

However you choose to manage time off requests, consistency is key.

A clear, fair time off policy, paired with good timekeeping, can go a long way with keeping employees happy. Not sure whether your timekeeping system makes the cut? Download our Timekeeping Compliance Checklist to determine whether you have a system in place that can meet everyone’s needs.

Timekeeping Compliance Checklist

If you're a small business owner or HR Manager trying to wrap your head around the complex world of time and attendance, check out our comprehensive resource page, Time and Attendance - A Complete Guide. This page spells out literally everything you'd need to know about time and attendance, including timekeeping procedures, time clocks, employee scheduling, compliance considerations, emerging trends and a whole bunch more.

Topics: Time and labor

Written by Complete Payroll

We do payroll, HR, timekeeping and more for employers all over the country from a small, rural town in Upstate New York. And we're constantly publishing articles and other resources to help business owners, HR managers or anyone that helps manage a workforce. Welcome to Payroll Country!

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