As peak vacation season nears and employees begin jockeying with coworkers to take off the days and weeks they want, employers may be wondering if their time-off policies are fair, simple, and effective or if they complicate work schedules unnecessarily.
What’s more important — logging a specified number of hours every weekday, or producing an impressive amount of work on a regular basis?
What’s the best way to guarantee high-quality and high-quantity production — allow employees a limited and tracked number of days off each year, or let them take as much or as little time off as they want?
What should an employer’s goal be when developing vacation policies — encouraging employees to take off a generous amount of time to guard against burnout, or monitoring and limiting time off to keep valuable employees from becoming slackers?
Debate over those questions has led a growing number of employers to break away from the traditional method of granting vacation time even as employees are using technology to stay connected while they’re officially off the job.
Several high-profile employers have implemented out-of-the-box vacation policies. Subscription movie provider Netflix and investment research firm Morningstar are among the employers that have moved to an unlimited and untracked time-off policy.
Morningstar’s website explains its policy: “Morningstar does not adhere to a ‘use it or lose it’ vacation philosophy. Instead, the amount of time you take off is up to you. When you take a vacation, it is your responsibility to make sure your work is handled in your absence by discussing your plans with your manager and coworkers.”
Multimedia financial-services company Motley Fool also offers employees a take-what-you-need vacation policy, but the company takes it up a notch with its Fool’s Errand program. Every month all employees, approximately 250, gather for an all-company meeting called The Huddle where the winner is picked and that person must take off two consecutive weeks during the ensuing month.
Why would an employer force someone to take unrequested, unscheduled time off?
At least three reasons, according to company spokesperson Alison Southwick. “The Fool’s Errand reinforces with employees that we WANT them to take time off. This policy supports our culture of trust and our goal of having happy coworkers who know that they can take time off from work.”
A second reason is that it helps reduce “single points of failure” within the company. “If you’re gone for two weeks, you have to make sure the company can carry on without you,” Southwick says. The third reason is that the Fool’s Errand is fun. “At The Motley Fool, we take fun very seriously.”
But what if someone is in the middle of something and doesn’t want to take time off? “Interestingly, the people who least want to win the Fool’s Errand are the people who need it the most,” Southwick says, “They’re the people who need to be reminded to take time off and clear their heads so they don’t get burned out. So, while some people might not be thrilled about winning the Fool’s Errand and completely taking time away from their work, we believe it’s in their best interest to take a break and recharge.”
Another part of the perk is the $500 the company gives the winner to spend while out for two weeks. “If they want to buy $500 worth of Cheetos and watch The Wire for two weeks, that’s cool. If they want to spend $500 to learn how to play the trumpet, that’s cool, too, MUCH cooler, actually,” Southwick says.
Whether an employer chooses to embrace out-of-the-box thinking on vacation policies or stick with a traditional policy, legal hazards need to be considered. Susan Llewellyn Deniker, a member with Steptoe & Johnson PLLC in Bridgeport, West Virginia, outlined some basics in a March article in West Virginia Employment Law Letter.
“It isn’t rocket science, but you must have a clear and consistent policy for calculating vacation accrual,” Deniker writes. That means addressing who is eligible for leave time, how it accrues, and when it may be used.
Employers also need to decide if their policy grants leave time to part-time employees, and they need to consider whether employees can take all their allotted time any time during the year or if they need to accrue a certain amount before taking any time off.
“There is no right or wrong method; you can pick the one that works best for your organization,” Deniker says.
Employers also should reserve the right to change their policies, Deniker says. For example, if a policy allows leave time to roll over from year to year and the employer decides that represents too much of a financial liability, it should be able to change the policy going forward.
“Additionally, your vacation policy should contain a provision requiring supervisor approval of vacation leave,” Deniker writes. “That allows you to maintain control of scheduling at your business so that all the employees in one department aren’t missing during the July 4 holiday week. An easy way to handle that is to determine how many employees will be allowed to be off in any given week. Then, when deciding which persons to grant leave to, you can give preference based on seniority or some other clear-cut nondiscriminatory factor.”
Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications. In addition, she writes for HR Hero Line and Diversity Insight, two of the ezines and blogs found on HRHero.com.