How to create the right bank holiday policy for your business

In the event of a bank holiday, you as a small business owner might find yourself juggling several scheduling conflicts and logistics. Who gets the day off? How much pay are they entitled to? What about employees who don’t celebrate holidays like Christmas or Easter? 

While most businesses close on bank holiday days, you are free to offer more flexibility to meet the needs of your diverse team who’d prefer to take that time off at a different time.

Knowing how to handle bank holidays will help smooth out the challenges in employee scheduling and payroll.

One of my jobs at Charlie is to make sure everyone stays happy, engaged, and has everything they need to do their best work. I’m a firm advocate for flexible working arrangements, and in giving employees everything they need to be their best.

I made this post to offer you guidance on how to implement a bank holiday policy, and why you might want to have one.

Crafting a bank holiday policy for your small business

Small businesses have to strike a tricky balance between employee’s expectations for taking time off on bank holidays and the logistics of workforce scheduling.

Having a clear bank holiday policy that aligns with your company values can be challenging for HR leaders and small business owners who don’t have particular expertise in this area.

Having a fair and transparent bank holiday policy can help improve employee morale, as well as their loyalty.

In the UK, the Employment Rights Act and the Working Time Regulations 1998 lay the groundwork for employee entitlements regarding bank holidays.

The UK Employment Rights Act gives a legal framework for various aspects of employment, including holiday entitlements. As a small business HR leader, it’s important to know that all workers are legally entitled to 5.6 weeks of paid holiday per year. That annual leave requirement often includes bank holidays, but not always.

That 5.6 weeks of leave is paid pro rata. For someone working five days a week, the entitlement they get is 28 days, which can include bank holidays.

A common misconception is that there is an automatic entitlement not to work on bank holidays. That isn’t necessarily so. It depends on the terms of the employee’s contract.

That’s why small businesses need to have clear and well-made bank holiday policies to avoid any potential misunderstandings.

Implementing your bank holiday policy

Clear communication at every step, efficiently managing time-off requests, and keeping meticulous records will help ensure that your bank holiday policy is effective and works both ways for both you and your employees.

• Effective communication: Keep everyone in your organisation in the loop with team meetings, email updates, and including your birthday leave policy in your handbook - with details like whether bank holidays are included in your annual leave policy. That sets the right tone and prevents misunderstandings down the line
• Handling requests and scheduling: This part can be tricky at a small business where both people and resources are at a premium. As most people will look to book leave around bank holidays, consider implementing a “first-come, first-served” approach, or maybe a rotational system for popular periods. It’s also helpful to both you and the rest of the team that employees plan and request their leave in advance, so you’re not short-staff at critical times
• Record-keeping for compliance: As a small business, you must keep detailed records of who takes leave and when. A tool like Charlie can be invaluable to you here with its automated time off recording. That way, all your bank holiday leave requests are up-to-date and accessible to you and everyone

Challenges in bank holiday policy implementation

Calculating holiday pay when some employees work on bank holidays and some don’t can be a complicated business. When framed the right way though, you can turn those challenges around in a way that supports your diversity and inclusion efforts.

Your workforce may be made up of Buddhists, Muslims, or adherents of any one of the many Christian denominations. A flexible and inclusive bank holiday policy allows employees to swap out traditional bank holidays and take time off on days that hold more importance for their culture or religion.

Having a fair and transparent bank holiday policy helps you efficiently manage your resources and manpower, making your business stays operational throughout the year while also respecting your employee’s rights.

Essential elements of a bank holiday policy

Regardless of how you frame your bank holiday working policy, there are a few core components that you’ll want to include as part of it:

• Eligibility criteria: Who is eligible for bank holiday pay? That may include full-time or part-time workers or even temporary and contract workers
• Pay rates: Specify pay rates for bank holidays, like standard pay, time-and-a-half, or double-time
• Annual leave inclusion: This is an important one, specify whether or not bank holidays are part of your standard annual leave allowance or not. This detail can also be added to your annual leave policy.
• Working on bank holidays: Outline the policies and pay rates for those working on bank holidays (if anyone does), including compensatory leave
• Request procedures: Make the process clear for how employees can request time off for bank holidays
• Staffing strategies: Offer solutions for managing staff shortages and scheduling conflicts, like rotating schedules, and voluntary work. You can also have an absence policy to deal with sickness and absences.
• Flexibility: State whether you will allow people to work on bank holidays, and take that leave at other times in the year. 

Leave your bank holiday policy in capable hands with Charlie

There’s no time like the present to review and refine your bank holiday policies - one that balances the needs of your business with the rights of your employees.

You can use Charlie to make HR policies and procedures that can assist you in managing your bank holiday schedules, tracking time off, and making sure your business stays compliant. With it, you can make a bank holiday policy that respects cultural diversity while maintaining your business operations.

Start a CharlieHR free trial today,  and be on your way to a bank holiday policy that’s fair, balanced, and crystal clear.