Setting up a simple time-off policy for your small business

There are many things to consider when setting up a time-off policy for your small business. To start with, you’ll need to comply with the law, but there’s a lot more you can do to attract and retain the best talent and ensure your business runs smoothly at all times.

Minimum requirements

Firstly, you have to remember that the statutory minimum requirement for paid time off is 28 days in the UK. So, this is where your time-off policy will begin.

The actual calculation is slightly more complicated (this is the UK government we’re talking about here). Staff are actually entitled to 5.6 weeks of paid leave. For someone working 5 days a week, that’s 28 days (5.6 x 5 = 28).

Part time staff use the same calculation. For example, if someone works 3 days a week, then they get 5.6 * 3 = 16.8.

If someone works more than 5 days a week, then they still only get 28 days. Sad, but true.

Maximum requirements

There isn’t a maximum limit to the amount of paid holiday you offer, so you are free to offer staff more than 28 days. Many companies now offer additional days to attract the best talent to their business or to help retain their best staff. Consider if you want to offer senior members of your team additional leave, or perhaps offer additional leave to staff that have been with the company for a long time. You’ll know what will work best in your business, but this is a great area to provide something different.

There is a growing trend in some start-ups to offer ‘unlimited holiday’ to their staff. As the name suggests, staff can take as much holiday as they like. Some of these companies even set a minimum, requiring staff to take at least 4 weeks off. This naturally will only work in a limited number of cases, but it certainly makes a headline-grabbing statement when you’re recruiting.

Drink On The Beach

Bank holidays

Bank holidays do not have to be given as paid leave. A company can choose to include them as part of the 28-day minimum requirement. In England, there are normally 8 bank holidays in a year, so this would leave staff with 20 days they could book at any time, plus the 8 fixed bank holidays.

Most offices close on bank holidays and so those companies tend to include bank holidays as part of your holiday allowance. Other businesses, such as retail, will remain open on bank holidays and may even require staff to be present on those days as they can be very busy.

Restrictions at busy times

Speaking of being very busy, most companies see peaks and troughs in their year, with some months being rather quiet, and others super busy. It’s ok for a business to place restrictions on leave during certain times of the year, but this must be fair (you can’t say you’re busy from January to December!). You’ll need to make it clear to staff when they can and can’t have time off.

Restrictions around availability

A problem that is fairly unique to smaller businesses is having a smaller pool of people to cover for someone when they are away on holiday. You might only have a single person on Customer Support, or in your Finance department and if that person is away, it can place a significant strain on everyone else. Consider having limits in place to make sure you don’t have too many critical staff away at the same time.

Setting up a simple time-off policy
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Make sure you can see when time-off requests clash with time-off that has already been booked, so you can discuss it with staff before it’s a problem. Encouraging staff to book time off well early will also give you more time to arrange for the appropriate cover during their absence.

Carry over unused days

Do you want to allow staff to carry over some of their unused annual leave to the next holiday year? There are some situations that require you to do this (see the gov.uk site for details), but it is a great perk to offer everyone and can help avoid the mass exodus at the end of the holiday year as everyone tries to use up their allowance.

What next?

Did you know Team Absence can help you set up a robust time off policy and enforce it in a simple and fair way? Try our free 14-day trial and see for yourself.

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