The end of the year is a busy time for many employers, especially seasonal businesses. Add to that increased vacation requests, planning company parties, productivity concerns, and weather issues, and you may be left with a headache or two. Here are some of the most common holiday challenges for small business owners and what you can do to prepare:
#1: Holiday pay.
Private employers generally are not required by federal law to provide paid holidays to non-exempt employees. However, if you close on a holiday, exempt employees must receive their full salary, as long as they work any part of the workweek. In some states, like Massachusetts and Rhode Island, certain employers may be required to provide premium pay to non-exempt employees who work on a holiday. Note: For a religious accommodation, employers may offer time off for religious observance and practices.
#2: Vacation requests.
The holiday season is a popular time for employees to request vacation. Provide employees with instructions for requesting time off and clearly communicate how vacations will be granted (based on scheduling needs, seniority, first-come first-served, or a combination of these factors). Give supervisors guidance on handling time off requests and hold them accountable for ensuring adequate staffing levels.
#3: Unscheduled absences.
Some employers see a rise in unscheduled absences before and after a company holiday. To help address this, consider requiring non-exempt employees to work the day before and after a holiday to receive holiday pay (unless the time off was scheduled in advance). Also, consider incentives to help limit unscheduled absences, such as an extra vacation day to employees who work during less desirable times or who meet certain attendance and punctuality benchmarks.
During the holiday season, illness, personal stressors, and other factors may impact employee productivity. Consider morale-boosting activities, such as company outings, potlucks, and volunteer opportunities. You can also help your employees balance work and life responsibilities by providing flexible work arrangements. Any declines in performance should be addressed promptly and consistently, and documented accordingly.
Some employers choose to close operations during the holidays to cut costs or adjust to lighter demand (this is known as a "furlough"). If you plan on closing during the holidays, be ready to answer questions about pay and unemployment benefits from affected employees. It is a best practice to communicate information about a furlough to employees early so they can plan accordingly.
#6: Inclement weather.
In many parts of the country, inclement weather can present a challenge this time of year. Under the Fair Labor Standards Act (FLSA), if non-exempt employees miss work because of inclement weather (either because the company is closed or because they are unable to make it into work), there is generally no requirement to pay them, unless you have promised otherwise. However, if non-exempt employees are required to report to work and wait for a decision on whether to close, they must be paid for the time spent waiting. Check your state law for additional pay requirements for non-exempt employees when the company closes after they have reported to work. Note: Exempt employees must generally receive their full salary when the company closes (regardless of whether it is for a full or partial day), as long as they have worked any part of the workweek.
#7: Holiday parties.
A holiday party can be a simple way to recognize employee efforts and boost morale going into the New Year. If you are hosting a holiday party, remind employees of rules governing dress codes and appropriate conduct. Also, non-exempt employees may be entitled to pay if attendance is required or the party occurs during work hours.
#8: Holiday bonuses.
Holiday bonuses are a way for employers to recognize and reward employee accomplishments. Remember that most bonuses must be factored into an employee's regular rate of pay when determining overtime.
Preparation is the key to making the holiday season as smooth as possible. Carefully draft and communicate policies and procedures to help you manage holiday related challenges.