Vacation pay will be the favorite benefit for some of your employees. Your vacation policy should be in writing so that there is no misunderstanding about how much vacation pay employees will receive. You can give as much vacation time as you want, but the standard appears to be from five to ten days after the first year of employment. From there, most companies raise the vacation rate based on the length of service. For instance, after five years it may increase by another week, and so on.

If vacation is earned on an accrual basis, make this clear in your written policy. An accrual basis means that the hours add up over time. For instance, if employees earn forty hours of vacation during their first year of employment, by the time they reach their six-month anniversary, they will have twenty hours accrued. When this happens, the employees usually own these hours, whether or not they are eligible to take them as paid time off. If they leave the company, they are paid for unused leave. Also, you should be clear on when accrued leave is available for use, such as whether an employee is eligible to request vacation leave after they have passed the ninety-day introductory period or reached their six-month anniversary. Most companies pay out unused vacation leave to employees who leave the company. Also, unused leave at the end of the year can be carried over to the next. You can put a cap on how much leave an employee can keep on the books. Employees who are not taking enough time off should be encouraged to do so; everyone needs time away from work to rejuvenate.

Employers are catching on to the concept that the ability to balance work and family life is important to many employees. Offering a generous vacation-leave package will help with your employee-retention efforts. For many people, vacation-leave ranks high on their priority list.

A written procedure should be in place for requesting vacation leave. Your policy should state how much advance notice is needed before requesting time off. Let the employees know that vacation leave will be approved at the discretion of the company. If another employee has already requested the same time off and it's been approved, you may not be able to honor the request from the second person. Also, you may choose to approve time off during the holidays in order of seniority, giving the person who has been there (or in one department) the longest the first opportunity to request time off, then go from there. You can do this as long as it is in a written policy. Vacation time taken during the holidays may also be granted on a first-come, first-served basis.

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