Building out your team can be an exciting and daunting experience. Bringing on employees means you can offer more to your customers. But it also means you have to take on employer responsibilities, such as setting up payroll and coming up with a time off policy.
Although it might be a while before you receive your first time off request, it’s best to have a system in place ahead of time. A clear policy makes it easier for your employees to make requests. It can also save you from unwanted administrative headaches down the road.
Your time off policy can be used as a valuable recruitment tool that sets the tone and culture of your workplace. Not to mention, it’s an essential component of wage and hour law compliance.
Keep reading to learn what you’re required to provide as an employer and how to create a time off request policy that works for you and your team.
Understanding Time Off Requests
A time off request is what an employee uses to formally ask to take a leave from work, either for vacation, health, or other personal reasons. In general, time off requests can be divided into two categories: paid or unpaid.
Paid Time Off
Paid time off (PTO) is when you provide employees compensation during their time off. Many employers offer limited PTO as an employee benefit, such as giving all salaried employees 10 days of paid time off each year.
The most generous type of PTO policy is called unlimited PTO, which doesn’t limit the amount of paid time off your employees can request as long as they complete their work. However, in unlimited PTO policies, each time off request must be approved.
Most companies offer ten days off (two weeks) each year besides paid holidays. You can check out the average PTO offered in your industry to help you create a competitive policy for your current and future employees.
Unpaid Time Off
In contrast, unpaid time off (UTO) refers to the time your employees take off from work without receiving pay. Employees can use UTO for vacation, sick time, or other personal reasons.
UTO may be useful for employees who have run out of PTO or when a business doesn’t provide PTO in the first place.
Are You Required to Provide Time Off?
Federally, you are not required to offer employees time off, according to the Fair Labor Standards Act (FLSA).
There are, however, some states that require PTO.
California, Colorado, Connecticut, Washington, D.C., Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington have implemented (or plan to) paid family and medical leave laws that require employers to offer accrued sick leave at the minimum.
For example, California requires you to provide one hour of sick leave for every 30 hours worked–up to 24 hours per year.
Parental, medical, and domestic violence leave may be required by your state’s laws too.
There also may be PTO laws around military service. For more information on leave requirements for military personnel, you can refer to the Uniformed Services Employment and Reemployment Rights Act (USERRA).
And finally, all states prohibit you from firing an employee for serving mandatory jury duty.
What about FMLA?
Though there are no federal laws requiring you to pay employees when they take time off, there are laws that protect their jobs if employees need to take leave for family or medical reasons.
Employees can take up to 12 weeks of unpaid job-protected leave to care for a new child, receive medical care, or provide care for a sick family member under the Family and Medical Leave Act (FMLA).
For instance, if you have an employee with a new baby, they’re allowed to take up to 12 weeks off work without losing their job, but you’re not required to compensate them.
The FMLA applies to businesses with more than 50 employees within a 75-mile radius. Furthermore, employees must have worked at least 12 months with an employer to be eligible to take leave.
Before creating your time off policy, you should check with your state’s laws or speak with an Hourly HR consultant to help you stay compliant.
Even if not required, offering PTO benefits can help you hire the right employees and keep morale up. QuickBooks found that more than 70 percent of employees believe it’s “very important” that employers offer paid time off for vacation, sick leave, and holidays.
Types of Time Off Requests
There’s a wide variety of reasons an employee might want or need to take time off from work.
Here’s a quick overview of the different types of time off requests you may choose to offer as an employer.
- Vacation: For leisure time or a break from work.
- Floating holiday: Time off employees can take whenever they want, and can be on a different day(s) every year.
- Sabbatical: Extended leave of absence (usually one year) given to long-time employees to be used for career development, research, or other goals.
- Medical/disability: Given to employees who cannot fulfill their work duties as a result of illness or injury; these can be short-term or long-term and are required in some states.
- Bereavement: Time off to grieve a death in the family.
- Family and medical leaves: The FMLA provides time off for use when employees are caring for newborns, going through the adoption process, taking care of a family member with a serious health condition, or caring for a relative injured in the line of duty.
- Religious observance: Companies with more than 15 employees must provide reasonable allowances for employees’ religious observances per Title VII of the Civil Rights Act of 1964.
- Jury duty: Time off for jury duty, which you cannot fire an employee for performing.
- Voting: Time off to vote in national or local elections. This can be PTO or UTO, depending on your state’s laws on voting rights.
- Military duty: To allow employees to return to work after fulfilling military service.
- Furlough: Unpaid days off work, usually used by the employer to save money in economic downtimes.
- Victim leave/domestic violence: Some states require you to offer UTO to employees receiving treatment or relocating as a result of abuse or domestic, sexual, or gender violence.
- Volunteering: Time off given to employees, so they can perform charitable work.
- Unpaid time off: If an employee needs time off, but doesn’t have a reason that qualifies for PTO, then they can request UTO.
If you provide time off for reasons not required by state or federal law, you should include that in your time off policy along with limitations, such as two days for volunteering each year.
What to Include in Your Time Off Request Policy
Now that you’re familiar with the laws regarding employee leave and the various types of leave you can offer, it’s time to look at creating a time off request policy.
Your request policy is a part of your total PTO package that outlines the steps employees must take to ask for time off and how you’ll handle multiple requests for the same days.
Instructions for Requesting Time Off
When an employee requests time off, should they email their manager? How much time in advance do they need? Are they required to provide a reason?
You should answer all of these questions in your time off policy. Keep the system as streamlined and consistent as possible to make things easier for you and your team members.
For instance, you can have a time off request form or template each employee can use to submit requests.
Then, decide who receives and approves requests depending on your business structure.
If you have a small team, it may make sense for you to handle all leave requests. But if you have several divisions, you can opt to give department heads and managers the authority to approve or deny requests.
Either way, make sure all employees know where to send their requests and managers know who has the authority to approve time off.
Times Employees Can’t Request Off
In some cases, you may have periods of time where your business needs all hands on deck to function properly. This often happens for seasonal businesses.
For example, if you run a landscaping business and your busiest month happens to be April, you might prohibit employees from taking vacation time during that month. Adding this limit ensures you can keep your business running and encourages employees to use their time off during slow seasons.
Limits for Time Off Requests
You don’t want to be dealing with time off requests every day, so you should include limits to how frequently your employees can ask. Specifically, outline how often and how many requests employees can make per year.
Unless you offer unlimited PTO, you should also outline the maximum amount of time employees can request off each year.
For instance, you may decide that each employee can take ten vacation days, five sick days, and two volunteer days each year. Whatever your numbers, include them in your policy.
If you choose to offer unlimited PTO as an employee perk, include language in your policy that clarifies eligibility and expectations.
For example, you may state that only full-time employees who have completed a minimum of 90 days of work are eligible for unlimited PTO. You should also mention that employees are expected to meet job expectations, and managers have the right to deny PTO requests if the time off would interfere with staffing needs.
Policy for Overlapping Requests
One issue that may come up when handling time off requests is overlap. Say you run a small hardware store along with two staff members. You need at least two people to keep the business running, but they both request the same week off.
How do you decide whose request to approve?
There are several approaches you can take, including:
- Seniority: The employee who worked for you the longest or who holds the higher position has the first choice on time off
- Employee preference: Let co-workers discuss and decide among themselves
- Manager’s decision: You (or a direct manager on larger teams) gets to decide
- First come, first serve: The first person to submit the request receives the approval
While any of these methods can work, we recommend using the manager's decision or first-come, first-serve as company policy. If you use seniority, this could be demoralizing to new or entry-level employees.
Business-Specific Policies
Finally, ensure your time off policy doesn’t get in the way of running a successful business.
For instance, if you have a small team, you might choose to limit the number of consecutive days employees can request off.
Or let’s say you’re a project-based operation, such as a construction company. You might prohibit employees from requesting time off during certain project stages when you need everyone.
Sample Time Off Request Form
Using a standard request form template for all employees can help streamline the process. Just click “make a copy” and you can edit your own.
Here’s what your form should include:
- Employee’s name
- Request date
- Number of days or hours requested
- Reason for request
- Employee signature and manager signature
- Approval/denial (including date of decision)
We recommend having employees submit a written request (or digital copy), so you can record the time off requests.
How to Manage Time Off Requests Fairly
When managing time off, you need to balance your employee’s requests with your company's staffing needs. Sometimes the two come into conflict, like when several employees want to request the same days off for vacation. Here are some ways you can keep the balance and manage time off requests in a fair manner.
1. Communicate Your Policy Clearly
Sharing your time off request process should be a standard step in onboarding all new hires. The easiest way to do this is by adding it to your employee handbook and going over it as you train someone.
2. Let Employees Find Replacements
It can be challenging to balance your business needs with employee vacation requests. As the boss, you want to make it work for everyone. One way to handle requests fairly is by giving your team members the chance to find someone to cover their shifts when requesting time off.
3. Make Yourself Accessible
If you’re the only person who can approve or deny a vacation request or other type of leave, you should be reasonably available. Make sure your employees know how to reach you, even if you’re offsite.
4. Keep Track of Requests
Recording all requests helps you manage your company leave policy more efficiently while also holding all staff members accountable to the rules and guidelines.
5. Consider a Rotating Schedule
If your business requires late-night or early morning shifts, consider using a rotating schedule where employees work a certain shift and then switch on a regular basis to boost employee health and morale. This is especially useful if your employees’ earnings are based on tips, as this gives everyone a chance to work high-volume shifts.
Furthermore, consider using software that gives you a time off calendar where the managers or entire team can view requests and track PTO.
Should You Use Software to Manage Time Off?
Is keeping track of time off requests giving you a headache? With all the compliance issues and potential lawsuits, it’s important to get it right. Software makes it easy to stay compliant and keep track of who’s requesting time off and when they’ll be gone.
With tools like Hourly, employees can easily submit time off requests from their phone, and managers can review and approve them in one easy step.
For more information on software that can help you keep your growing team organized, explore Hourly’s seamless payroll solution for salaried and hourly employees today.
Ready to transform your business into a profit-pumping machine? Learn how with our monthly newsletter.
