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Small Business guide for Holiday PTO Policies

Can you believe it’s the end of the year?

The holiday season is upon us, which also means that you may be juggling employee paid time off (PTO) requests. For you and your employees to truly enjoy holidays, it’s smart to develop a PTO policy that works for everyone.


Full-time employees in the U.S. get an average of 8 scheduled paid holidays 1 each year, according to data from the Bureau of Labor Statistics. The Federal Government gives 10 paid holidays to its employees, but from a legal standpoint you’re free to choose any days you want (with the exception of Massachusetts and Rhode Island businesses).


That being the case, PTO policies have evolved significantly over the past decade and continue to do so. It’s increasingly important to offer flexibility for your employees as a part of cultivating a positive workplace culture.

To get started planning your holiday PTO schedule, ask yourself these questions:


  • What’s the budget? As with any company benefit, you can only offer what the budget allows. Work from your budget to see how different policies affect it so that you can make a balanced decision for the company and its people.

  • What do employees want? The easiest way to find out what employees want is to ask them. Send anonymous surveys to poll employees. If you have two or three viable policy options, feel free to ask for feedback on them.

  • How will it affect operations? Traditionally, businesses will close entirely for paid holidays. If you’re considering more flexible policies, look at how it will impact your business operations.


In terms of adding flexibility to your plan, many companies are incorporating floating holidays into their holiday PTO schedule.


  • A floating holiday is a PTO day that employees can take as they see fit.

  • Companies typically allot one or two floating holidays to employees along with the fixed holiday schedule.

  • Floating holidays are different from personal/vacation PTO because they do not need to be accrued and cannot be carried over or cashed out if unused.

There are many benefits to incorporating floating holidays into your PTO policy:


  • More Inclusive: Floating holidays recognize that not everyone celebrates the same holidays. Including them in your policy shows that you respect different cultures and practices and provides flexibility to employees to celebrate what matters to them.

  • Better Flexibility: Flexible work policies are very attractive to employees. Floating holidays allow employees to have more control over how they spend their time off.

  • Increased Efficiency: Believe it or not, floating holidays can actually be more efficient for your business. It alleviates the need for HR to move around holiday PTO for those who want to celebrate a holiday your schedule does not recognize. You also may be able to keep your business running during holidays like Christmas if you have employees who do not celebrate it.


The key takeaway from all of this is that it is important to be thoughtful when creating your holiday PTO policies. Remember, holidays are part of your benefits package, which are significant factors for attracting and retaining employees.


1 https://www.bls.gov/opub/ted/2018/workers-in-private-industry-received-an-average-of-8-paid-holidays-in-2017.htm



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