How to set up a vacation policy for your company.

Track Paid Time Off, Even When You Offer Unlimited Vacation

Posted June 18, 2015 by Jacob Donelly in Managing Your Team
Switching to unlimited vacation policies is a popular trend among startups. But continue to track paid time off too - even if the offer is unlimited.

Switching to unlimited vacation policies is a popular benefits trend among startups. And there's good reason why. Doing so shows employees you care about their work-life balance. It's also an easy perk to offer that helps attract top talent.

But continuing to track paid time off - even if the offering is unlimited - is important as well. 

Unlimited Vacation Still Needs Tracking

Now I know what you’re saying … You offer unlimited vacation, so you don’t need to worry about tracking time off. 

Many companies that have this mentality. If there is no policy, there’s no reason to track anything. The employees take days off at their liberty and you don’t have to spend time organizing or recording the time off. Doing so would just create more busywork that takes time away from working on your business.

But even if you have an unlimited vacation policy, I would recommend that you track the time off that all of your employees take. There are three separate reasons to support that argument.

Encourage People to Take Time Off

There are a few cons to unlimited vacation policy. If employees are torn between taking too much time off or too little, they tend to err on the side of caution. Empower your employees to take time off, even on small teams.

By tracking people’s time off, your managers can become more efficient at policing people who are NOT taking enough time off. We all agree that employee burnout is a very real thing. Maybe employees feel attached to their desk, worried about the pile of extra work that would be waiting after a vacation. 

Tracking time off can effectively act as a preventative measure to employee burnout. Encouraging work-life balance greatly increases employee loyalty to your company. Plus, employees will be more efficient and motivated after time relaxing on the beach than slogging through early stages of burnout.

But once you have determined that people need to take time off, how can you encourage them to go? The company Evernote has an interesting way of encouraging people to leave. If you take at least a week vacation, you get a $1,000 bonus as spending money. The way they word it is that you are forfeiting that bonus if you don’t take the vacation. This creates an environment where people want to take time off, which will have them come back more refreshed.

Keep Track of People Not Getting Things Done

Part of the reason that companies offer unlimited vacation is because they want to show respect and treat employees like adults. And while that attitude is great to have, the reality is that some employees are just negligent employees.

Tracking paid time off can recognize employees that may  be taking advantage of the vacation policy. Does this employee fail to work ahead in his or her absence? Do your team run into a bottleneck every time that person is away on vacation?

A problem with the unlimited vacation policy is that employees are allowed to take as much time as they want.  Therefore, letting someone go for taking too much time could be difficult.

Track your employees' vacation days, and you'll have the foundation for a constructive conversation around that employee's work-life balance. 

Prevent Unforseen Problems

Keeping track of and approving vacation time also protects you from any unforseen problems with employees.

For instance, employees could take days off in disrespectful or inconvenient ways. They could fail to notify anyone, leading to a dispute on which days they took off or not. They could fail to give adequate notice, potentially shutting down teams or small offices. 

Building an approval and tracking system for vacation days could also avoid issues of bias. Managers could approve or reject vacation days based on an employees' role, seniority, gender or race. Unintentional or not, doing so is unacceptable and a lawsuit waiting to happen.

By keeping track of who is taking time off and who isn’t, you’ll be able to better detect these trends. You'll also have a point of reference that will allow you to protect your company. If people are taking too much time, being biased, or otherwise causing any problems,  you'll be able to know through your tracking.

How to Track Paid Time Off

A common implementation for tracking time is through a spreadsheet. Put employees' name in one of the cells and then start marking the dates that they took off. At the end of the quarter, half year, or year, you can quickly calculate how much time they took off and then compare any trends.

However, a better option is to use a simple piece of software for time tracking. This is built into the JustWorks platform, allowing you to approve vacation and keep track of who is where. This can also help you with planning your teams' projects because you’ll know when everyone will be back.

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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.