How to Design Flexible Time Off Policies

Managed by Q
June 6, 2019

Employee expectations for the workplace are shifting. Not only do teams want more from the physical office and amenities provided, but they also have new perspectives on how, when, and where they work. People are seeking out more flexible ways of working, such as working remotely full- or part-time. In fact, Gallup’s State of the American Workplace report found that 35% of employees polled said they’d change jobs for a flexible work location and the ability to work offsite full-time. An additional 37% polled said they wanted to be able to choose to work remotely at least part-time.

With a tight hiring market, flextime, parental leave, and vacation policies can make a big difference in a prospective employee’s decision to join a company or a current employee’s decision to stay. Small startups and fast-growing companies may be setting these flexible time off policies for the first time, while more established companies may be reviewing their existing policies to stay competitive and attract and retain talent. Some state and city laws pertaining to paid family leave and paid time off are also changing. We aggregated key facts to consider when reviewing your employee policies.

Flex time and remote work

The ability to adjust one’s hours and work remotely has been shown to improve employee productivity, health, and wellness. Flexibility also enables employees to balance their jobs with caregiving responsibilities, which often supports diversity and inclusion efforts as caretakers are often women and people of color.

In 2018, the job search startup Werk commissioned a study on flexibility in the workplace and found that 96% of the workforce needs some form of flexibility, but only 42% of workers have have access to it and only 19% have access to a full range of flexible options at work. Unfortunately, flexibility still carries a stigma that workers with flexible schedules are somehow working less than those with more traditional work hours.


To be effective, workplace flexibility needs to be supported by well-defined policies that apply equally to employees at all levels and can be customized to employees’ specific work and needs, as well as your company’s needs and industry. When implementing flex time consider:

  • How work will get accomplished outside of the office
  • How hours outside the office can be structured
  • How flextime hours can be communicated and accounted for
  • Any days or times when all team members should be in the office
  • Any equipment, software, or special permissions employees need to work effectively outside of the office

The Society for Human Resources Management suggests that you consult with a lawyer when setting up your flex work policies, especially if you have hourly employees who are eligible for overtime. They also suggest rolling out flex time with a trial period so you can gather feedback from team members along the way.

Paid Time-Off

While paid time-off is one of the most common employee benefits, according to a 2014 survey by Glassdoor, only a quarter of employees actually take all of their eligible days off, while 40% take just 25% or less. Taking time off has been well documented to positively impact employee performance, morale, wellness, culture, productivity and retention.

While the Fair Labor Standards Act in the United States does not govern a minimum paid time-off, according to Rise 77% of private employers offer paid vacation to their team members, with full-time team members earning on average 10 vacation days after one year of employment. In an effort to attract and retain talent, as well as demonstrate a level of trust, many companies have begun offering unlimited vacation policies. However, those run the risk of creating a culture of uncertainty if it appears some employees are taking vastly more time off than others. In response, companies are now offering minimum vacation policies, which reinforce the idea that time off is not only good for the individual employee, but for a company as a whole.

To ensure all employees feel entitled and encouraged to use their vacation, set up clear policies around when and how vacation should be requested, coverage plans while an employee is out of the office, and how many employees on a specific team can be out at the same time. Ensuring these policies are written down and consistently applied will create an environment where everyone feels empowered to take their time off.

Family and Parental Leave

Many employees must balance their work schedule with caretaking responsibilities, whether they are caring for a new child or an elderly relative. However, many small startups don’t have a parental leave policy in place until an employee becomes pregnant. In addition, the United States is one of the few countries not to require paid family leave for employees, but the culture and laws around family are slowly changing. For example, New York State began phasing in a paid family leave act in 2018 that will give workers up to eight weeks off at 50% of their average weekly wage, increasing to 12 weeks at 67% when the law is fully implemented in 2021.

Beyond what is legally obligated, many employers are rolling out more generous family leave policies to help compete for top talent. According to the Harvard Business Review (HBR), from 2015 to 2017, more than 75 large companies issued press releases touting new or expanded parental leave policies. They report, “Forward-thinking companies recognize that generous paid parental leave and other family-friendly policies provide reputational benefits, confer a competitive edge in recruitment, and increase employee productivity and retention.”


Like flex and vacation time, effective parental leave policies should be customized for each individual company. But to be effective and avoid potential discrimination lawsuits, policies should avoid distinguishing between a “primary” and “secondary” caregiver. According to HBR, the most equitable family leave policies include:

  • Disability leave for employees who are physically unable to work due to pregnancy, childbirth, or related medical conditions
  • Parental leave that’s equally available to all employees, regardless of gender or caregiver status
  • All new parents—mothers and fathers, biological and adoptive, LGBT, salaried and hourly—without requiring that employees first prove themselves to be primary caregivers

Overall, paid family leave is beneficial to employees, a company’s bottom line, and the economy overall. Research published by the New America Foundation reported that workplaces with parental leave policies are 60% more likely to report above-average financial performance than companies without such policies.

As companies set or revise flexible time off policies that can be a better fit for their employees’ lives and support work/life integration, they can do so with an eye towards building their employer brand and attracting and retaining current employees. For a deeper look at how the need for flexibility is reshaping the modern workplace and how companies can integrate it into their culture, download Managed by Q’s 2019 workplace trends report.


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