Choosing which holidays to include in your PTO policy can be tricky without mandated paid holidays. With the right holiday mix and flexibility, you can make a significant impact on attracting and retaining great talent. We’ll walk through the most common PTO practices for California companies, the benefits of floating holidays, and tips for staying compliant, so you can build a holiday schedule that truly supports your team.

What Holidays Should Be in Your PTO Policy?

When setting up a PTO policy, it helps to include a thoughtful mix of holidays to keep your employees happy and your company competitive.

• The Big National Holidays: Many California companies stick to the major federal holidays to meet employee expectations. Offering these holidays aligns with employee expectations and boosts hiring appeal:
  • New Year’s Day (January 1)
  • Memorial Day (Last Monday in May)
  • Independence Day (July 4)
  • Labor Day (First Monday in September)
  • Thanksgiving (Fourth Thursday in November)
  • Christmas Day (December 25)
• Additional Observed Holidays: Some companies go a step further by adding days that appeal to a diverse workforce and acknowledge important cultural milestones:
  • Martin Luther King Jr. Day (Third Monday in January)
  • Presidents’ Day (Third Monday in February)
  • Juneteenth (June 19)
  • Veterans Day (November 11)

These aren’t required, but they can make your company more appealing, especially if you’re looking to attract talent from larger organizations that may already offer a broader range of holidays.

Floating Holidays for Flexibility

Floating holidays give employees the option to choose days off based on personal, cultural, or religious preferences. California’s diverse workforce appreciates flexibility, making floating holidays a popular option. Adding one or two floating holidays lets employees take time off for what matters most to them, without expanding the standard holiday schedule. Many companies find that floating holidays are a budget-friendly way to add a bit more flexibility.

Navigating Compliance with California PTO Policies

While California allows PTO customization, staying compliant avoids potential legal risks.

California PTO Guidelines

California doesn’t require companies to offer paid holidays, but once a holiday policy is in place, it acts as an implied contract. Consistency is crucial here:

• Outline Eligibility and Pay Rates Clearly: Document eligibility rules in your employee handbook, and make sure everyone’s on the same page. If holiday pay is part of the policy, apply it consistently and include clear guidelines.
• Sick Leave Protections: Be mindful of policies that could unintentionally penalize employees for using legally protected sick leave. For instance, requiring work the day before or after a holiday to qualify for holiday pay may conflict with state protections. If an employee needs a sick day, they shouldn’t miss out on holiday pay as a result.

Preventing Discrimination Issues

California’s anti-discrimination laws make it essential to apply holiday benefits equitably. Unequal distribution of holiday benefits based on religion, race, or other protected characteristics can lead to discrimination claims. Keep it simple by applying the holiday policy fairly across all employees.

Best Practices for a Balanced PTO Policy

A compliant, clear PTO policy can work wonders for employee satisfaction while safeguarding your business. Here are some tips to consider:

1. Define Core and Optional Holidays: Set core holidays like New Year’s and Thanksgiving, with optional floating holidays for flexibility.
2. Listen to Employee Feedback: Survey your team on valued holidays to create an inclusive schedule.
3. Set Clear Rules: Outline holiday pay rules and ensure compliance with sick leave protections.
4. Review Competitors’ PTO Policies: Stay competitive by comparing PTO offerings. It might be worth expanding your own offerings to keep top talent happy.
5. Review and Communicate Policy Changes: Review policies annually, keeping your team informed of any changes.

By combining standard holiday practices with flexible options like floating holidays, you’re setting up a policy that boosts employee morale and builds a supportive, inclusive workplace. 

Employee feedback, competitor insights, and legal compliance ensure a policy that benefits everyone. It’s a great way to show you’re invested in your employees while staying compliant with California labor standards.

Wrapping It Up

Building a holiday PTO policy that supports both your team’s needs and your business goals isn’t just about picking dates to close. It’s about creating a work environment where employees feel valued and supported. Offering a balanced mix of core holidays and flexible options like floating holidays makes a meaningful difference in morale and retention.

Whether you’re a startup trying to attract new talent or an established business working to keep your valued employees, a well-structured PTO policy is a strong asset. 

Stay informed and get expert guidance when needed. Allevity is here to help—call us at 530/345-2486 to explore our service levels and see how we can support your PTO policy.