SOP Friday: Next Year's Holiday and Pay Schedule

By Karl_Palachuk
In Channel
December 20, 2013
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Karl Palachuk / Karl Palachuk

One more quick job before the end of the year: Put out a calendar for your employees that lists the Pay Days and the Holidays for next year. This is a handy little guide that will make everyone’s life easier. Once it’s done and distributed, then it’s done for the year and you don’t have to worry about it.

Sample Pay Days and Holidays
Click to Enlarge

Notes on Pay Dates

I’ve talked elsewhere about Choosing Paydays. But even after you’ve selected the pay schedule, banks and governments get in the way. So whether you pay on the 5th and the 20th or on the 10th and 25th, you’ll have to move an occasional payday because it’s on a Sunday or a holiday.

Employees, especially new employees, should have a clear sense of when they will be paid and for which days. As you can see from the example, our pay day is roughly ten days after the period for which employees are being paid. So work performed January 1-15 will be paid on the 25th.

Notes on Holidays

Holidays are an important consideration. They determine which days your office will be officially closed. This discussion is separate from whether employees will be paid for these days or whether work on these days is paid extra (e.g., time and a half for holidays).

One place to find a list of holidays is www.timeanddate.com. If you need to list holidays for a different country, you can do that as well.

As you can see at that site, there are dozens and dozens of official holidays or bank holidays. A lot of them are so arcane you can’t believe they’re a real holiday. For example, we do not take off September 6th for Carl Garner Federal Lands Cleanup Day Observance. Maybe we should. But we just don’t. If we took off all the holidays listed at that site, we’d take off 110 days (not counting four more days if we take off all of Kwanzaa).

That’s 110 days off out of 365. If we assume that 14% of those days fall on the weekend, that leaves 95 days off during the work week. We can’t take all those days off. That’s 36% of the work days during a given year.

So you have to pick your holidays. As you can see from our list, we have chosen eleven “holiday” days for the next year. Some of these are pretty standard and pretty much mandatory, like New Years. Others are up for debate. For example, the government and banks take off Columbus Day in the United States, but most of our clients are open that day. So it’s not on our list.

We also throw in a few extra days off just because of where they are on the calendar. In the U.S. we celebrate Thanksgiving on the fourth Thursday in November. Almost none of our clients are around on the Friday after that, so we’re closed. In 2014 Christmas is also on a Thursday. We don’t always give off the day after Christmas, but I guarantee very few of our clients will be around, so we’re taking that Friday off as well.

Most people who don’t work for a government, there are about 8-10 holiday days per year. Government employees tend to get about 10-13.

Note: Taking these days off is a totally different discussion from paid holidays or paid days off. We give salaried employees (managers) the days off with no reduction in their monthly salary. So that means, technically, these are paid holidays.

We are closed on our listed holidays, so hourly employees are not paid for these days. If you choose to pay hourly employees for these days, you need to figure out a fair compensation based on their regular work schedule.

When you’re closed for a holiday (or any reason), you need to have someone on call in case clients really are at work and have a need for service. See the discussion of On Call and Night Staff.

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Isn’t interesting how the smallest thing has layers of ramifications when you start to examine it? Your basic action steps here are:

1) Decide on the pay dates for the year

2) Decide which holidays you will take off

3) Put these on a schedule that will become your “official” list of pay dates and holidays

4) Distribute this to all staff and all new employees

Comments welcome.

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About this Series

SOP Friday – or Standard Operating System Friday – is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete “table of contents” for SOP Friday at SmallBizThoughts.com.

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Next week’s topic: Basic Customer Service Training

🙂

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