PTO under a 4-Day Work Week: Vacation Policy and Tracking

Your company has switched to a 4 day work week - great! But what does this mean for vacation policy, sick leave and tracking?

Do you offer the same number of paid holidays of as before? How do you calculate various factors such as accrual, longer workdays, and compliance? In this post we discuss the challenges and solutions of paid time off under a reduced working schedule.

Should Vacation Days Change?

When moving to a 4-day work week, you'll need to decide if vacation days should be cut down or stay the same as in a 5-day week. Let's look at both options:

Option 1. Reduce Vacation Days (by 20%)

• Why: Employees already get an extra day off each week.
• How: If employees had 20 vacation days in a 5-day week model, they'd get 16 days in a 4-day week.
• Pros: Keeps the balance between work and time off.
• Cons: Employees might feel they're losing vacation time, which could affect morale.

Option 2. Keep Vacation Days the Same

• Why: Maintaining the same number of days can boost satisfaction and work-life balance.
• How: Employees continue to get 20 vacation days, even with the 4-day week.
• Pros: Higher employee morale and retention.
• Cons: Potential drop in overall productivity, needing careful planning to avoid business disruption.

What About Sick Leave?

Sick leave policies may also need a review:

Option 1. Reduce Sick Leave

• Why: To match the reduced workdays.
• How: If employees had 10 sick days in a 5-day week, they'd get 8 days in a 4-day week.
• Pros: Consistent with fewer workdays.
• Cons: Employees might see this as a reduction in benefits.

Option 2: Keep Sick Leave the Same

• Why: Gives employees a solid safety net for health issues.
• How: Employees keep their 10 sick days.
• Pros: Promotes trust and well-being.
• Cons: Might lead to higher absenteeism, which needs good management.

Handling Public Holidays

Public holidays can be tricky with a 4-day work week. Here's how some companies handle it:

Option 1. Offer a 3 Day Work Week During Holidays

• Why: Follows the traditional holiday approach by reducing the workweek.
• How: If a holiday falls on a workday, the workweek drops to three days. And if the public holiday is on the same day as the day that employees typically take off, another day in the week is taken off e.g. both Monday and Friday off.
• Pros: Employees get more time to recharge.
• Cons: Can disrupt business operations and require rescheduling.

Option 2. Keep 4 Day Week during Holidays

• Why: Ensures a consistent schedule.
• How: If a holiday falls on a workday, employees still work four days that week, ignoring the holiday.
• Pros: Predictable schedule, less disruption.
• Cons: Employees might feel they're missing out on holidays, affecting morale.

HR & Time Off Tracking Software

Aside from changing vacation and sickness policies, you may also need to change your leave management software to accommodate the additional requirements that come with a reduced workweek.

Here are some of the features you should consider:

1. Granular Customization

It's common for companies to implement their 4 day work week in different ways within their organisation. For example, the engineering team may all work Monday to Thursday, whereas the customer support team may rotate their days off to maintain a 5 day week presence.

Therefore, you'll need to make sure your HR system can handle granular customisation at both a team and employee level.

2. Half-day or Partial-day Tracking

One thing we've realised about the 4 day work week over the years: no two 4 day week companies are the same. Some companies take every Friday off, others rotate and some even take half days off. So when picking your HR & time tracking software, you'll want flexibility.

3. Mobile Access

This should be the case for both 4 day week and 5 day week companies - but your software should have great mobile support as often PTO, bereavement, family & sickness decisions are made on the move.

4. Automation

Your HR & Time Tracking software shouldn't get in the way of productivity. It should work seamlessly in the background and only be called on when needed. To achieve this, it needs to have features such as automated leave management, automated payroll processing, notifications and more.

Final Word

There’s no one-size-fits-all answer for adjusting vacation days, sick leave, and public holidays with a 4-day work week. Each approach has its pros and cons.

Ultimately, the best choice really depends on the unique needs and culture of your organization. By weighing these options up and getting employee feedback, you can find a balance that benefits both the business and your team.