Vacation policies for employees

Setting standards for how much vacation time employees earn, based on their tenure and value. April 24, 2002

I have a six-man shop. An eight-year employee is asking for 3 weeks of vacation next year. What would you do? What about sick pay? He is a valuable employee, $15.00/hr plus limited benefits.

Forum Responses
After an employee has been with me for 1 year I give them two weeks paid vacation/sick/personal days. They can use it as they see fit. Plus, all employees get at least 7 paid holidays off. If I had a valuable employee that had stuck around for as long as your guy, I would give him the three weeks. In fact, I would probably have done it sooner--maybe after 4 or 5 years. I guess the question in your case is what are you giving your other guys? If you give him three weeks will it cause a problem with the rest of your crew? I've found that it's a good idea to have a standard policy regarding stuff like this so there is no question in anyone's mind as to what they will get and when.

1 week after 1 year, 2 weeks after 2 years, 3 weeks after 5 years. All national holidays. 3 personal days. And here in northeast PA, the highest of all holy days - opening day buck season.

From contributor B:
I was audited by my worker's comp carrier. I give vacation plus holidays. I had to pay SAIF on holiday and personal time-off pay, but not on vacation pay. So, it is now all vacation pay and they can take it when they want to. On a holiday or otherwise, still vacation.

Is he worth it? Can you afford it? Why is he asking for more now - is he unhappy? Can you do something else that will make him happy?

Good employees are tough to find, as are good bosses. I only have 1 employee. I treat him well and he treats me well in return. I pay him over $25 per hour plus the medical benefits he wants, no sick leave or holidays or vacation, and he earns it. We worked this out when he started and I didn't have benefits in place like we do now, and we stick to it.

If you raise your prices in your future bids by $.50 per hour you will have enough to cover the expenses for him. And you probably won't lose any jobs, because say you have a job with 100 hours labor = $50.00 their cost. 6 men X 2000 hours per year average = 12,000.00 hours X $.50 per hour = $6,000.00 per year, which is a bit more than what the cost of $15.00 per hour X 40 hours equals (works out to $600.00 per year). That should be enough to cover the costs noted in the above posts and you will be fine, as long as he is worth it.

I raised my shop rates by $2.00 per hour recently to cover unknown expenses like insurance increases, which I think are likely soon, and nobody has noticed it. Jobs come in the same as always.

"I give vacation plus holidays. I had to pay SAIF on holiday and personal time-off pay but not on vacation pay."

That is not true in California. When you get your annual audit, you are required to pay the workers comp on vacation time. The reason is that otherwise, employers could call a large portion of the time paid for "vacation pay" and reduce their workers comp costs. The workers comp people want you to pay on bonuses, vacation, holiday, even gifts to employees.

From contributor B:
That is what I do and the auditor said that he would not question as to whether it was a holiday or a vacation day - I just had to call it right.

If he is as valuable an employee as you say, then show him he is. He sold those hours to you at bargain basement prices (15 an hour?) in the hopes of some recognition later, maybe in the form of a paid vacation. So give him at least that, and let the others know that if they demonstrate the same type of loyalty that they too may spend a few meager days a year with their families.

A good and loyal employee is worth his/her weight in gold in today's job market. I have had way too many that are there for just the paycheck and don't give a darn about the profitability of the company that makes that paycheck happen.

I would however make certain that there is a notification period of at least 60 days for any vacation time of over 1 week duration and 30 days for 1 week. This way you can at least make plans for that time when he is gone.