Employee Vacation Policy



There are many employee policies that get misunderstood but it has been my experience that the employee vacation policy is at the top of the list. The only explanation that I can come up with is that everyone is anxious to go on vacation" as quickly as possible. The confusion generally is on when is the vacation actually earned and there's to use. I hope the Employee Handbook Templates website can help to answer this question, as well as, many others.















So let's start with the above question if you are considering putting it into your employee vacation policy. I also must clarify that the following answer does not comply with some states laws like California. The exception to this would be if your business had the monies going into a trust. Bottom line is please make sure you comply with whatever your state requires before putting it into your employee handbook.


So if an employee leaves after nine months…


So as an example, if your employee vacation policy is that after one year an employee is entitled to one week of vacation, how would you want to state that? Although I am not an attorney and you should always clarify with an employment attorney, or in some cases employee handbook templates will have example policies, I would make sure you clarify the following information. When does the employee actually earn the vacation? Is it all year long they are earning it? Or will it only be credited to their vacation account if they complete the entire first year? So if an employee leaves after nine months of employment would they get a prorated amount paid or nothing at all because they didn't complete the entire year?

You see where it can get confusing? This is exactly why your employee vacation policy needs to be crystal clear. If they are earning vacation all year you will be required to payout what they have earned even if they leave before the year is up. What about the second year? I would ask the same question and make sure that your policy covers it in detail. I can tell you for sure that every employee will think that they have earned some time if they leave before the year is up.


They will feel that they have earned a full week's pay…


Next confusing issue will be that they will feel that they have earned a full week's pay no matter how much time their average work week was during the year. As an example if you hire a full time forty hour per week employee, but they average only thirty-seven hours per week during the year how much vacation would they earn? In my mind it is simple! They would only earn thirty-seven. On the other hand what if that same employee averages forty-three hours per week? I would suggest that you limit that to only forty hours of vacation earned. Spell something like this out in your employee vacation policy within your employee handbook.


Make sure you define who is eligible…


Some other issues that will need to be clarified within your employee vacation policy is the difference between full time, part time, temporary, on call, and so on. Make sure you define who is eligible for vacation and who isn't. This means that no matter how many hours they average a week they would only be eligible for vacation time if they are classified a full time employee. Now whether this is the case or you want to give vacation time to everyone, certainly this is your choice. But make sure your employee handbook makes it very clear.

Again, check with your state law. A way to make your life very easy when producing an employee handbook is to use employee handbook templates that have been written by employment attorneys. There are some very good ones at very affordable costs.





Sample Employee Vacation Policy


The Company recognizes that paid time off is extremely important for many reasons, but most importantly rest and relaxation. Therefore, full time employees working an average of thirty (30) or more hours per week are offered paid vacation as outlined below.

Employees requesting paid vacation time off will request that time through their supervisor. Supervisors have the final approval of that time requested; however, every effort will be made to approve the time if possible. When there are conflicts where more than one employee is requesting the same or overlapping vacation dates the employee requesting those dates first will be given priority. However, when two or more employees request vacation at the same time the more senior employees request will be approved.

Sample Employee Vacation Policy

In the event an employee resigns or is terminated all accrued vacation time will be paid in accordance with state and federal law.

When an employee requests vacation time it can be used in increments as small as one (1) hour or up to the total amount the employee has accrued at the time the vacation will begin. Unless approved by a Company Official an employee will not be granted an advance on vacation time not accrued.

Based on the accrual rates outlined below an employee accrues vacation during the year based on actual hours worked, not including overtime hours. In addition, an employee will continue to accrue vacation time when using approved vacation time or approved sick leave time.

Sample Employee Vacation Policy

If an employee is suspended or if they take vacation without authorization the vacation time will not be paid and that time off will be considered Leave Without Pay (LWOP) or Absent Without Leave (AWOL). In addition, employees will not accrue vacation when they are in a LWOP or AWOL pay status.

Any time an employee has accrued more than twice their annual accrual rate on their anniversary date any amount over their annual accrual rate will be paid out on the very first pay period following their anniversary date. As an example if an employee accrues at the rate of five (5) days per year and on their anniversary date they have accrued ten (10) days or more of vacation five (5) days will be paid out on the very first pay period following their anniversary date.

Sample Employee Vacation Policy

Eligible employees will accrue vacation time at the following rates;

Years Completed               Number of Days Accrued

*****************        ************************

End of Year 1                              0

End of Year 2                              5

End of Year 3                              5

End of Year 4                              5

End of Year 5                              5

End of Year 6                              10

End of Year 7                              10

End of Year 8                              10

End of Year 9                              10

End of Year 10                            10

End of Year 11                            15

End of Year 12                            15

End of Year 13                            15

End of Year 14                            15

End of Year 15                            15

End of Year 16                            20

End of Year 17                            20

End of Year 18                            20

End of Year 19                            20

End of Year 20                            20

End of Year 21 or More               25


Good Luck and May God Bless You!

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