Implementing Holiday Pay and Vacation Rules

Providing comprehensive holiday pay and vacation policies demonstrates to workers that they are appreciated and respected. Here’s how to create inclusive pay and time off policies.

What you’ll discover:

Can I have separate rules for holiday pay and time off for different employees?
What should I keep in mind while developing an all-inclusive vacation pay and time off policy?
To make my vacation pay and time off policy more inclusive, what choices can I include?
What exactly is a floating vacation?

Whether they celebrate Christmas or not, most employees would want to have a paid day off on December 25. Other workers, on the other hand, would rather spend time with loved ones at Diwali, Rosh Hashanah, Eid, the Lunar New Year, or another meaningful holiday. Holiday pay and time off rules that work for everyone are common features of an inclusive workplace. It may make your employees feel more appreciated while also assisting you in attracting and retaining top personnel.

Can I have separate rules for holiday pay and time off for different employees?

Employers are not required by federal or state law to give holiday pay or days off. Nonetheless, they usually demand you to be fair and flexible when it comes to your workers’ religious practices.

States may create exceptions to these regulations, particularly if they relate to an employee’s protected status or the nature of the firm in which they work. As an example:

Oregon. Veterans are entitled to a paid or unpaid day off on Veterans Day unless it presents a major difficulty for the company.
Massachusetts. Workers working in specific firms that are open on Sundays or legal holidays are normally required to be paid 1.2 times their regular rate (this is expected to end on Jan. 1, 2023).

Moreover, under federal law, different workers may be compensated differently for holiday hours worked. It depends on whether they are subject to overtime regulations (nonexempt) or not (exempt):

Nonexempt hourly workers are paid 1.5 times their usual rate for any hours worked in excess of 40 in a workweek; however, paid holidays do not count as hours worked.

Salaried, exempt workers are paid whether the firm is open or closed for a holiday.

Whether your organization provides paid vacations or not, you should clearly define your policy in your Employee Handbook. It is beneficial to provide information such as which categories of personnel are subject to the regulations. For example, you may restrict holiday compensation to workers who work at least 20 hours per week and only provide it to permanent rather than seasonal personnel.

What should I keep in mind while developing an all-inclusive vacation pay and time off policy?

It is not only excellent business practice to ensure that your holiday pay and time off policy covers everyone, but it is also mandated by federal law. Employers with at least 15 workers are typically required by Section VII of the Civil Rights Act to offer reasonable accommodation for employees’ religious observances, which may include time off for holidays.

Unless it creates severe issues for your company, such as if Christmas Eve or Day is your busiest day, you may wish to arrange ahead of time to offer time off for employees who want it to celebrate it as a religious holiday. But, keep in mind that the reasonable accommodation required by law does not have to be a day off. Alternatively, it may mean giving employees a few hours off to attend a religious service, a quiet area to pray, or the ability to wear specific apparel.

Apart from that, an inclusive holiday pay and time off policy typically attempts to treat all workers equally. Most businesses in the United States are closed on Christmas Day, for example, but it is prudent to anticipate significant religious holidays and be prepared to approve employee Time Off Requests on such days.

You are not obligated to approve time off requests for seasonal retail employment and other jobs that generate the majority of their earnings during the Christmas season. Yet, it is important to be explicit about employment expectations, including how you handle salary and time off, throughout the recruiting process.

To make my vacation pay and time off policy more inclusive, what choices can I include?

Employers may wish to reconsider if their present practices exclude some employees when it comes to holiday pay and time off. It may be difficult to ensure that policies are fair and that they are implemented equitably. Some ideas for making your policy more equitable and inclusive include:

If everyone is unable to take time off for a certain holiday, utilize seniority, a random lottery, a rotating schedule, or another equitable way to determine who gets time off.
Incorporate floating vacations. They are an excellent approach to broaden your company’s holiday rules. Employees with floating holidays may take time off for holidays or days off of their choosing.
Organize office festivities. When done correctly, holiday festivities allow workers to learn about diverse cultures and traditions.
Some holidays, like as Veterans Day and Martin Luther King Jr. Day, might be granted time off for your employees to engage with the community via volunteer work or outreach.

The key to developing inclusive policies is to ensure that your employees and future employees are not arbitrarily denied holiday pay or time off for personal or religious reasons.

What exactly is a floating vacation?

Offering floating holidays is one of the finest methods to build a more inclusive holiday policy for your organization. This offers workers a fixed number of days to commemorate key occasions in their lives. These occasions might be religious, cultural, or simply personal.

You may begin by reviewing your existing list of paid and unpaid holidays. Which are religious and which are unlikely to be practiced by everyone? You certainly already have a holiday for New Year’s Day, but what about the Lunar New Year? It is common practice to provide staff with two or three floating days off to utilize as they see appropriate.

Many employment rules do not allow scheduled or floating vacations to be carried over to the following year if they are not utilised during the year in which they are provided. If the floating holidays you give are insufficient, workers will most certainly enjoy it if you allow them to celebrate on their own time off or other days.

It may be difficult to accommodate everyone’s holiday time off demands, but doing so is likely to help you recruit and retain a diverse workforce. Moreover, workers who sense they are regarded and valued will go above and above for the organization.