How to Handle Holidays During a 4-Day Work Week
Holidays and paid time off matter to employees; therefore, they should matter to businesses, too. Challenges arise regarding leave and holidays, particularly for companies that implement a permanent four-day work week. There are multiple scenarios possible, so companies should consider them all and be upfront with staff before implementing policies regarding holidays.
To handle holidays during a four-day work week, companies should determine whether to offer PTO or unpaid leave, decide which holidays are covered under the policy, communicate the schedule to the employees in advance, plan for increased absenteeism, and remain consistent with their chosen policy.
In this article, I’ll cover the basics of the law regarding PTO and holiday pay for hourly and salaried employees, as well as time off requirements for religious observances. Then, I’ll discuss several approaches for handling holiday pay, PTO, and unpaid leave for businesses utilizing a four-day work week, as well as how to handle federal and bank holidays. Finally, I’ll provide tips for handling holidays, as well as how to implement specific policies.
Four-Day Work Weeks, Holiday Pay, and the Law
Businesses that enact a permanent four-day work week may find that handling holidays and paid time off (PTO) becomes particularly challenging. A four-day work week may increase productivity overall, but when you add in requested leave and federal holidays, it can significantly impact the work schedule.
Before jumping into policy ideas regarding holiday pay, PTO, and unpaid leave for employees working a four-day schedule, businesses should first understand their legal requirements. Any business that implements policies and allows them to lie dormant may open itself up to legal ramifications that could negatively impact the business.
Laws Regarding PTO and Holiday Pay for Hourly Employers
Hundreds of companies offering four-day work weeks provide PTO or unpaid holiday leave. These policies make it possible for a company to remain competitive within the labor market and contribute to the overall well-being of its workforce. Additionally, PTO and holiday pay may increase productivity among staff.
The majority of companies offering PTO or unpaid time off offer a full day’s pay (e.g., eight hours in a 32-hour work week) for each requested and approved vacation day.
With that said, there are no laws requiring employers to offer paid or unpaid leave. This includes businesses implementing a four-day work week as well as those working under a “traditional” schedule.
If, however, an employer does opt to provide paid vacation to employees, all policies must comply with state law. For example, in Arizona, all earned vacation time counts as wages. Therefore, depending on the company's policies, they may be required to pay out unused PTO if the employee leaves the company, for whatever reason.
Salaried Workers, PTO, and Four-Day Work Weeks
With salaried workers, the laws are a bit different. Employers are required to pay exempt employees (i.e., salaried workers that do not receive overtime pay) their full weekly salary, even in the event of a holiday. For example, if a salaried employee works only three days because a holiday falls on one of their regularly scheduled work days, they must receive payment for the entire four-day work week.
Religious Holidays and Time Off
Businesses must provide reasonable accommodations for the observance of religious holidays for employees who practice said religion, regardless of the length of the company’s work week. However, if a company may experience undue hardship in relation to these accommodations, an employer may deny the request.
With that said, most courts agree that unpaid time off is a reasonable accommodation for religious observances. Therefore, most businesses allow employees to request time off for religious holidays by using a vacation day.
Many businesses that have implemented four-day work weeks have enacted policies utilizing “floating holidays.” These holidays prevent conflicting holiday schedules by allowing employees to request time off for holidays that may not be covered in the company’s holiday schedule. It’s up to the company whether or not they enact such policies.
Four-Day Work Week Approaches for Handling Holidays and PTO
When it comes to four-day work weeks, there are a few different approaches that businesses take in terms of handling holiday pay and vacation days.
Some of these approaches include:
Not offering paid vacation days or holidays. This approach may work for some businesses, though it significantly impacts competitiveness within the labor market. Additionally, it can cause issues regarding employee morale, well-being, and job satisfaction.
Offer a limited number of paid vacation days or holidays. Limiting paid vacation days is a good compromise. It doesn’t significantly impact productivity or restrict employees from enjoying reasonable time off. However, it may not satisfy all employees, especially in such a competitive labor market.
Provide full paid vacation days and holidays. Out of all approaches, this is by far the most generous. However, it’s a difficult policy to manage, especially when you’re already working on a compressed weekly schedule.
Any of these three approaches is acceptable as long as the employer consistently follows its policy.
Regardless of which option a business chooses, it’s critical that it communicates the decision to all employees well in advance. This lets the workforce know what to expect and helps them plan their schedules and holidays accordingly.
4-Day Work Week and Federal Holidays
Another issue that arises regarding the four-day work week and time off is the occurrence of the six federal and bank holidays each year.
Many businesses that switch to a four-day work week worry that these holidays may negatively impact productivity and affect profits.
For example, if a four-day work week typically occurs from Monday through Thursday, and a federal holiday occurs on a Monday, this severely restricts the work week to only three days. This can be further complicated by increased vacation requests, thus reducing productivity significantly and leading to a significant reduction in the workforce during that time.
To handle this effectively, companies have two main options:
Encourage employees to take advantage of the extra time off. Though this isn’t a solution to less productivity, it shows the workforce that the company cares. It’s not wise to stress employees by demanding they cram a week’s worth of work into three days. Instead, companies may encourage them to take the time off and come back refreshed and ready to shine.
Offer an alternative work schedule for weeks with holidays. For example, if the work week typically operates from Monday through Thursday, you could switch it to Tuesday through Friday during weeks with federal or bank holidays. This doesn’t limit productivity and allows employees to enjoy the holiday off.
There are, of course, other options available, such as working alternative hours to still hit the 32-hour work week, but these aren’t ideal. Approaches vary depending on the business, but regardless, they must be discussed with staff and clearly stated in the employee handbook and company’s policies.
Tips for Handling Holidays During a Four-Day Work Week
No matter which holiday, PTO, or unpaid leave approach a company takes with its employees, they must carefully consider how to handle these situations. Any failure to report changes in policy could result in a poor business reputation and, worse, potential lawsuits.
Here are some tips to help you handle holidays during a four-day work week:
Be clear and upfront about holidays covered under PTO and leave policies. If some holidays are exempt, make this clear in the employee handbook and the employee compensation policy.
Communicate the holiday schedule to employees in advance. Avoid surprises. Don’t leave it to employees to figure out the holiday schedule on their own. State it clearly and put it in the employee handbook. The earlier that people know, the earlier they can make any necessary arrangements for time off.
Plan for increased absenteeism during holidays. Though this is inevitable, companies can avoid the severity of the impact by following the tips in the next section entitled, “Implementing PTO in a Four-Day Work Week.”
Be consistent with your holiday policy. Businesses should do their best to avoid treating employees differently in regard to the holiday policy (e.g., offering certain days to those with seniority instead of a first-come, first-served basis). Additionally, avoid making exceptions for certain employees and refusing to do the same for others.
By following these tips, you can successfully navigate the holidays while maintaining a four-day work week schedule.
Implementing PTO in a Four-Day Work Week
Although paid time off and holiday pay aren’t required by law, many businesses find that giving employees this benefit increases productivity, even if they’re already working only four days per week.
Implementing a paid time off policy is good for business, especially for companies with a workforce with strenuous duties or overall demanding jobs. These employees may already be under increased stress due to work demands. Additionally, around the holidays, employees tend to feel more stress at work. Therefore, allowing this time to recharge can help them relax, unwind, and rejuvenate their minds, hopefully leading to more productive work on their return.
Here are the essential things a business needs to do when implementing a PTO policy for a four-day work week:
Write a Policy for Handling Time off Requests
It is imperative that businesses provide clear and concise instructions for time off requests. This allows employees to plan in advance and lets employers better manage their staff to prevent a labor shortage (and reduced productivity) during major holidays.
In this Time Off Request Policy, the organization must include all variables affecting leave. If the employee’s position or length of employment plays a role in PTO, make sure this is clearly laid out.
For example, new employees may not have access to paid leave until they’ve provided service to the company for X amount of months, whereas employees with the company for X months (or more) have access to PTO.
State how much time employees may earn, how this time off is accrued, and whether the company pays unused PTO out upon separation.
Implement an Approval Process Policy
To effectively manage time among employees, especially during a four-day work week, employers must offer a fair and practical evaluation process for time off requests.
In this policy, the organization must provide the following information:
When employees must request time off (how far in advance)
How to submit a request for time off
How the requested time off is approved or denied
Who determines the approval or rejection of time off requests
The majority of companies require employees to put in a request for leave earlier in the year or at least within four weeks of the desired time off. Depending on the organization, decisions are usually based on a first-come, first-served basis. This arrangement usually benefits companies as employees put in their requests earlier, making it easier for businesses to manage potential staffing shortages.
Consider Implementing Special Policies
To prevent staff shortages and significant declines in productivity and profit, some organizations implement special policies regarding leave.
For example, many organizations limit the number of major holidays an employee can request. Some may only offer one major holiday approval per year. Others may decline time off requests if another employee has already requested the same date.
Other companies may ask employees to avoid taking a leave of absence during major holidays, especially if it is a major profit period for the company (e.g., retail stores and Christmas, grocery chains and Thanksgiving, etc.).
Regardless of what policies you choose to implement, employers must make workers aware of any changes as soon as possible.
Conclusion
Four-day work weeks are an excellent way to give employees a morale boost and increase productivity and profits, but only if the company plans appropriately. When implementing a four-day work week, businesses should first consider how to handle holidays and leave.
The most important thing for employees to keep in mind is to remain flexible, consistent, and reasonable. They should do their best to accommodate an employee’s needs. By doing so, companies can ensure that everyone remains happy, productive, and ready to take on the next work challenge.