Guide to Implementing a Mandatory Vacation Policy in Your Company

Forcing people to take time off sounds as strange as combining cheese and honey — but both are actually great, trust us!

While one brings a much-needed novelty to your evening snack, the other is a life-saver for exhausted overachievers who need a little push to relax and recharge their batteries. 

There is, however, some science to it. 👩🏻‍🔬

We’ll leave the charcuterie pairings for later, and stick to mandatory vacation policies for now. Let’s examine the pros, cons, legal matters, and directions to create mandatory vacation policies your staff will welcome with open hands.

What Is A Mandatory Vacation Policy?

Usually, staff members receive a certain amount of PTO and unpaid time off they can use as they please, as long as they stick to the pre-imposed time off rules. 

The mandatory vacation policy is different because it proposes minimum time off employees must take, whether they want it or not. These policies (also called mandatory/compulsory PTO/vacation/time off) outline conditions and guidelines for mandatory days off employees have to use within a certain timeframe.

Benefits And Downsides Of Mandatory Vacation Policies

You may wonder why some employers would go as far as to banish people from work (and pay them for it!) when there’s not even a federal law that requires employers to provide any time off. 

Mandatory vacation policies have many benefits for both employees and companies that create them:

• Burnout prevention strategy — Burnout can sneak up on everyone if they’re not in touch with their inner needs and well-being. Mandatory vacation days are one of the best burnout prevention strategies: it’s a way for employees to regularly unwind, guilt-free. 

• Improved business planning — A well-thought-out mandatory time off policy can help managers plan and assign the workload by letting them know about the availability of their team ahead of time.

• Productivity boost — Well-rested and refreshed workers will come to work ready to engage and be more productive. Workplace mistakes are less likely to happen, and 

• Increased sense of belonging and care for staff — Implementing a mandatory vacation policy is a much less controversial way of saying “You will take care of yourself, whether you like it or not”. When most companies try to squeeze out as much as they can from workers (and pay them the least amount possible), this move will undoubtedly prove you’re not like the other employers, and your people come before profit.

• Promoting healthy work-life balance — It’s highly important for everyone to have a rich life outside the office. Family, hobbies, personal projects, and good old chillout time are equally as important as work; a good balance lets the employees have it all.

• Employee retention tactic — All the benefits mentioned above amount to a healthy workplace culture, and serve as another employee retention tactic. Right now, the job market is unstable and layoffs still impact hundreds. Still, keeping your top performers happy and loyal should remain one of your priorities, as replacing them is troublesome and expensive.

• Preventing PTO hoarding — Unused vacation days pile up and cashing them out all at once may be expensive for a business. The best way to prevent employees from stockpiling PTO is to impose mandatory time off rules.

The benefits of implementing a mandatory vacation policy far outweigh the cons, but there are still some concerns to keep in mind:

• Not letting people choose — Some people truly have no issues with their workload and thrive when busy, and they’d prefer extra money from PTO payout. Others have complex projects they’re working on and interrupting the flow 
• Vacation scheduling difficulties — 
• Overcomplicating the work for your HRs — Creating another category of time off means more work for HR and more space for mistakes.

You’ll be pleased to hear that each of these issues has an easy fix:

• Select only a couple of days from their total time off fund and make them mandatory. This way, they still have time off they can use as they please; a mandatory portion of PTO is still there for them to rely on, but firmly scheduled.

• Introduce an advanced, yet easy-to-use PTO tracker to your HR department. Most of the PTO-related work can be automated and all mistakes nipped in the bud. With pre-defined vacation types, everything can be noted in a few clicks, without any impact on your existing workplace ecosystem.

Should Mandatory Days Off Be Paid Or Unpaid?

Mandatory time off should be paid for, by all means.

Otherwise, it’s not a workplace perk, but more resemblant of a furlough leave that has few benefits for employees. 

How To Create And Implement Mandatory Vacation Policy In 5-ish Steps

The first step is to examine what makes sense for your specific business needs.

There’s no one-size solution for PTO policies, especially when they’re mandatory.

For businesses that depend on specific holidays and seasons, it will make sense to schedule company-wide shutdowns during the slowest periods. 

Others are busy day in and day out: think fast food chains and fast fashion retailers. In this case, the wisest thing to do is to schedule mandatory PTO for each employee in advance, so it doesn’t clash with others’ leaves and there’s always someone on deck.

Now, sketch out your mandatory vacation policy.

Will the mandatory days off be consecutive and scheduled by the company, or do they just receive PTO they have to use by a certain date? Will the rest be covered by a use-it-or-lose-it policy? How to enforce the mandatory vacation policy?

You have your work cut out for you — with different state and federal rules that apply! 

Be sure to check the Family and Medical Leave (FMLA) rules about the 12 weeks of unpaid, job-protected leave employees can receive per year, and how it may impact the mandatory vacation policy.

Part three: decide how to insert a mandatory vacation policy into your existing PTO rules.

This part may be tricky if you intend to decrease the amount of PTO they can freely decide about. The safest way to go about this is to apply the new rules for future employees and let the current staff members decide if they’re comfortable with having a mandatory vacation policy. 

You may need to change up the contracts for the ones that gave you the green light, so prepare for some legal and HR meetings. 

At the end, announce the changes and enjoy the benefits!

Tracking the improvements a mandatory vacation policy brought to your workplace may become an interesting case study and a success story you’ll love to share.

How To Track Mandatory Vacation Time?

We suggest using VacationTracker as a complete leave management solution, no matter the leave policies you have in place.

Our labor of love completely automates leave tracking and helps you stay compliant wherever your staff works, making it a great solution for remote companies.

Vacation Tracker gave me back at least 10 hours a week plus numerous hours back to our managers & employees because it’s all automated. - Michelle B.

How would you like 10 hours more, just for yourself, every week?

Have a taste of our sweet deal: try everything for free, for 7 days, and let us know what you think!

P.S. While we’re at sweet deals, try pairing hard goat cheese with a generous drizzle of honey. You’re welcome. 😎

Anja Milovanovic

A journalist turned content writer – Anja uses her investigative skills to produce high-quality SaaS, Marketing, and HR content.