Your Guide to Creating a Paid Holiday Policy
The holiday season is upon us! As a business owner, you know there’s a natural tug-of-war between your personal desires around the holidays and the needs of the company. Here are some tips on how to set up company policies to keep things in balance.
Which holidays do you celebrate?
Unless you have a union or government contract that dictates holidays, you get to pick the holiday policy for your business. You could choose to stay open every day with no holidays, or shut down for a day without providing pay, or set standard paid holidays for everyone, or even make up a holiday!
Most residential service companies now offer paid holidays as a benefit to employees. To stay competitive in the market and help employee morale, we recommend you include these six paid holidays at a minimum:
New Year's Day (January 1)
Memorial Day (Last Monday in May)
Independence Day (July 4)
Labor Day (First Monday in September)
Thanksgiving Day (Fourth Thursday in November)
Christmas Day (December 25)
Companies may include additional paid holidays, like the Day After Thanksgiving, Christmas Eve, or the employee’s birthday. We realize that closing down shop can be tough, especially in the busy season, but paid holidays are a way to provide your employees with much needed relief from hard work.
In case of emergency…
That said, if your company provides emergency services for customers, you probably can’t shut down entirely on any given holiday. In this case, you need a plan. Estimate the holiday call volume and the number of employees (both office and field) you’ll need to address it, then ask for volunteers to be on-call. Let employees know that if you don’t get volunteers, you’ll schedule people for those days. It is surprising how often you’ll get volunteers who want extra money or who realize a specific holiday is more important to other coworkers. If you have to assign employees, make exceptions for those who were approved for vacation time prior to the announcement and those who worked on-call the last holiday. Consider also exempting anyone who worked the same holiday the previous year.
Pay for working on a holiday
If employees must work on a holiday, you have a few options for how to pay them. Our recommendation is to grant non-exempt employees full holiday pay PLUS whatever would normally be due for the hours they work. That is, if if they work 2 hours on a holiday, give them 8 hours of holiday pay plus 2 hours of regular pay.
For exempt employees we recommend a small bonus as a thank you for working on a holiday, or granting some additional PTO hours instead (sometimes referred to as “comp time”).
As a reminder, overtime pay is only due based on hours actually worked. Holiday pay does not count towards overtime, so an employee may end up with more than 40 hours of work for the week but all at the regular rate.
Weekend holidays
If a paid holiday falls on a weekend, businesses often observe the holiday on the closest standard business day, but you might take a different approach – especially if you often respond to emergency calls on weekends. You could grant holiday pay but still keep the business open, or allow employees to choose whether to take off Friday or Monday (ensuring no more than 50% of employees are off on a given day), or give employees an additional PTO day instead of observing the holiday directly.
Emergency leave around the holidays
Let’s be honest, some employees “get sick” the day before or after a holiday, conveniently extending their break beyond their approved time off. For these scenarios, you can have a company policy disqualifying someone from receiving holiday pay if they have emergency leave immediately before or after. It’s also acceptable to use your attendance policies to discipline (or terminate) for these absences, especially if you have an employee who’s chronically absent and this is just one more occurrence.
But always allow wiggle room. Sometimes people truly get sick or have legitimate emergencies on the day before/after a holiday. Having the flu on Thanksgiving is bad enough without having to lose pay or get disciplined.
Use these tips as you plan for the holidays, and reach out to us if you have any questions or doubts about your company policies. Wishing you the best this holiday season!
