What Should a Time Off Policy Include?
A time off policy should include:
- Who is eligible and when can they begin taking time off
- How time off is allocated
- How employees can take time off
- What happens to unused time off
- Types of time off
This may feel like a lot to think about. But answering a few simple questions now will help you define a clear policy and make it easier going forward—for both you and your employees.
Let’s take a closer look at each part of your time off policy.
Who Is Eligible for Time Off
First, consider which of your employees are eligible for time off:
- Are both full-time and part-time employees eligible?
- When are employees eligible to start taking time off? As soon as they are hired? Or only after they have worked for a set period of time?
How Time Off Is Allocated
Next, define how your employees get time off:
- Do employees get all of their time off at the start of each calendar year? Or is it accrued over time?
- If your employees accrue time off, how? Is it based on their hours worked? Do they accrue time off for holiday pay?
How Employees Can Take Time Off
Now that your employees know they have time off, let’s help them use it. Minimize confusion and any potential disagreements with a clear policy and procedure for requesting time off:
- Are there any limits on how much or how little time off employees can take at once? For example, would 2 hours be acceptable? How about 4 weeks?
- How much advance notice should an employee give?
- What is the procedure for requesting time off?
What Happens to Unused Time Off
Let’s say you’ve hired some hard-working employees who didn’t use all of their earned time off. Uh oh, now what?
Scenarios like these are common: 46% of U.S. workers don’t use all of their PTO. So be sure to explain what happens to unused PTO in your policy:
- Does unused time expire or roll over year to year? Are there rollover limits?
- Will unused time be paid out when an employee leaves (whether voluntary or not)?
Types of Time Off
Like you, your employees have many demands on their time outside of work. They may be raising kids or caring for their aging parents. They have doctor’s appointments and vacation plans.
Your time off policy can specify approved reasons for PTO, including:
- Sick Time*
- Personal Time
- Vacation
- Holidays
- Bereavement
- Parental Leave (mothers and fathers, adoptions and births)
- Military*
- Jury Duty*
- Voting*
- Vaccination*
- Blood Donation*
* Subject to mandatory requirements under New York State and federal laws
How to Manage a Time Off Policy
Once you’ve created your time off policy, make sure it’s manageable for your company. Put a measuring system in place to track employee eligibility and time taken.
For some small businesses, a simple spreadsheet with embedded calculations is all that’s needed. For more complex businesses, an app like Clockify can make it easier to track time off and attendance.
Need Help Managing PTO for Your Small Business?
Employ-Ease helps Rochester small business owners like you create time-off policies and set up systems to track PTO. Another way we make it Easy to Employ!
To discuss your payroll and benefits needs, schedule a free, one-on-one conversation with Employ-Ease owner Lisa Kretzer.
This post has been updated from the original article published on April 20, 2022.
