Despite these dreary and rainy days, this is an ideal time for employers to think about their vacation policy and perhaps provide clarification to employees who may be confused as to how and when they can take their days.
Policies generally serve as a communication tool for businesses. Employees want the ability to refer to a policy to find out exactly what their employer is providing. Vacation is certainly an area where there should be no misunderstandings.
Are you one of those VERY FEW employers that doesn’t provide vacation? After all, it isn’t required under Massachusetts law. That’s right. Vacation is not a mandated benefit for private non-unionized employers in the Commonwealth.
Then why do you have a vacation (a/k/a PTO) policy? Why have you been counseled about the importance of providing such paid time off? The answer includes the fact that most job seekers “expect” to have PTO. And paid vacation not only addresses the needs of recruitment but also helps to maintain your existing valued employees. Generally, employers want a workplace where their employees are not completely burnt out! Consider the fact that providing a vacation benefit reduces employee turnover. It also supports employee work-life balance.
Is it always possible for an employer to offer vacation? If you have a snowplowing business, your concern would be having sufficient staff for the winter months. If it is a seasonal business, and you are hiring employees solely for your busy season, it may be a situation where vacation is not offered.
Assuming you have a year-round business and you are among the majority of employers who provide vacation time, you may set limits on when vacation time may be utilized based on the needs and demands of your business.
For example, do you traditionally have a “busy season”? Florists and candy shops are usually very active in the weeks leading up to Christmas and the time before Valentine’s Day. Can you have a policy that states employees will not be granted vacation time during those periods? YES.
These parameters, however, must be set forth IN ADVANCE, so that employees understand those restrictions. Ideally, this policy should be provided when an offer of employment is made. Or, if you implement the policy at another time, post-hire, it’s only fair to provide sufficient notice to the employees.
In the case of the snowplow business, where there may be other year round duties, consider letting the employees know during the summer of 2024 that there will not be any vacation time granted during January or February 2025, so that these employees are not blindsided in 2025 and can make appropriate plans for vacation during other months.
Although vacation is not required, when an employer offers paid vacation days to an employee in an offer letter, in their policies, as part of a contract, or as part of a written agreement, those paid vacation hours are considered “wages” in Massachusetts.
The methods of providing such paid time off vary. Businesses may have employees earn / accrue vacation days, typically on a monthly basis. You may choose to have an employee complete an introductory period before allowing the accrual or the use of available days. Or, you can provide a frontload or lump sum of days or weeks at the beginning of a calendar year or upon the employee’s anniversary year.
In choosing a method of providing vacation time, employers MAY consider whether applicants for employment expect access to time off on a more immediate basis rather than waiting for a few hours or days to be accrued each month. But some employers may not be comfortable providing a liberal number of weeks to a newer employee. Perhaps that “privilege” would be extended to longer term employees (i.e., frontload for those employees with 3+ or 5+ years in the Company. Another consideration is the requirement that employers must pay employees for all accrued unused vacation at time of separation from employment, whether or not the separation was voluntary or involuntary.
What is a use it or lose it policy? This type of policy would require your employee to use their vacation time within the year it was accrued (the anniversary year or the calendar year, whichever your business uses for providing these employee benefits). If the employee fails to use the vacation time, they would lose that paid benefit. As an alternative, you can implement a policy that allows the employee the ability to “carry over” some of the unused vacation but lose the remainder.
In addition to the vacation hours an employer allows, some businesses close for certain weeks during the year and give those weeks as “paid vacation” to staff. It is common for employers to close the week of July 4th, as many businesses find that to be a slow week (except for entities in vacation areas, such as stores or restaurants at the Cape!). Similarly, some employers close for the holiday week in December. Providing employees with paid time off during those weeks is sometimes referred to as “forced vacation.”
Employers may set up their own procedures for the vacation request and for scheduling. It is important to retain the right to determine whether or not to approve the request for time off. Always use objective factors to make that determination, which might relate to the needs of the business during the requested period of time.
A reminder that vacation time that is provided as a benefit is viewed like earned wage. Employers may not hold back vacation payment as a disciplinary measure. In Massachusetts, and many other states, it must be paid at time of separation from employment, whether that separation is voluntary or involuntary.
To properly track sick time and manage vacation time, some employers prefer to keep “separate buckets” while other role the time off into one category of Paid Time Off (PTO). There are pros and cons to both approaches.
When you revise your handbook or other policies, you may choose to re-think your vacation policies and adjust those provisions accordingly. As with any aspect of the interpersonal human resources function, communication as to your policies and expectations in terms of vacation is key.
Attorney Helene Horn Figman combines specialized legal knowledge in employment law with the skills and perspectives uniquely suited to Human Resources Consulting www.figmanlaw.com
Information about her anti-harassment and anti-discrimination education programs can be found at www.workplaceawarenesstraining.com
This article has been prepared by the Law Offices of Helene Horn Figman, P.C. for general informational purposes only. It does not constitute legal advice and is presented without any representation of warranty whatsoever.