How to Create the Ultimate Vacation Policy

October 3, 2018

How to craft the ultimate vacation policy

A well-defined vacation policy is a great addition to your company culture. It also helps set expectations for employees while carving out time for much-deserved rest and relaxation.

Here’s how to create the ultimate vacation policy for your company.

What should a vacation policy include?

A crucial aspect of determining your vacation policy is first agreeing on how much time your employees should have off. Next, be sure to clearly define what constitutes as a vacation day. You want your staff to fully understand the difference between vacation days, sick days, and other types of absences. This way, there won’t be any confusion about what type of leave a person is taking when they request for the time off.

You should also incorporate into your vacation policy information on how to request off. Do employees submit a request to the HR department? Do they have to ask permission first? Explaining these details makes sure that everyone feels comfortable when asking for time off. It also helps you as an employer better plan around such absences, if you know ahead of time.

How many vacation days are normal?

You’re probably wondering how many vacation days are typically used by employees in the US. That number can vary greatly depending on the industry and company size. However, two weeks is the standard that most companies operate by. It’s also normal for companies to offer one week of vacation to new employees, then allow them to earn more time the longer they stay at the company.

The latter can be a great way to incentivize new employees to stay at the company longer. It also sets the tone for hard work and dedication at the company, as it shows that working hard and staying committed results in increased personal rewards for employees. Still, other companies choose to offer unlimited vacation time, which comes with its own pros and cons.

Can an employer take away vacation time?

Employers are certainly entitled to vacation time just as employees are. The amount of time you take depends on how fair you’d like to appear to your employees. For example, you might not want to take an entire month of vacation if your employees only get one week of vacation time. Traveling for work, however, is a different story.

Being unfair about vacation policies isn’t a way to build a positive culture or show employees that you care. Instead, put yourself in the shoes of your employees and provide them with an amount of vacation time that seems fair to you, to them, and to the success of the business.

Do I have to pay out unused vacation time?

Many employers wonder whether or not they’re expected to pay out unused vacation time. After all, employees might be asking for some kind of compensation if they haven’t used all of their vacation days in a given year. This can be a tricky question to approach, especially since it varies by state. Some state governments require that employers give employees a payout in this circumstance, but not all of them do.

Be sure to take a look at your state’s wage and employment laws and incorporate this relevant information into your vacation policy. This way, everyone has clear expectations about whether or not unused vacation time gets compensated for.


As a professional copywriter, Dan produces strategic marketing content for startups, digital agencies, and established brands. He helps organizations tell stories, achieve online presence, and builds brands that communicate with their customers. Dan is also a regular contributor to Forbes. He started writing after his first professional role as a health promotions coordinator for a local family physicians office.

Category: Benefits, HR Tips & Trends

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