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How to Handle Holiday PTO Without Hurting Morale

By Jeanette Coleman, SPHR & SHRM-SCP on Nov 04, 2025
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The holiday season brings excitement—and a scheduling challenge for business owners. Balancing increased demand, year-end deadlines, and multiple holiday PTO requests can quickly become overwhelming.

When several employees request the same days off or unexpected call-outs occur, managers often face tough decisions: Who gets priority? How do you stay compliant while keeping operations running smoothly?

You’re not alone. With the right planning, communication, and a well-defined holiday call-out policy, you can manage time-off requests fairly, maintain productivity, and protect your team’s morale.

RELATED: How to Schedule Employees Fairly on Weekends and Holidays >>

Is Your Holiday PTO Policy in Writing?

The foundation of fair holiday PTO management is a clear, written policy. This ensures consistency and transparency, helping employees understand expectations before the holiday rush begins.

Your request time off policy should outline:

  • How far in advance must employees submit PTO requests

  • How many employees can take time off simultaneously

  • How scheduling conflicts are resolved (e.g., seniority vs. first-come, first-served)

  • How unplanned absences or holiday call-outs are handled

  • Which holidays qualify for paid time off or premium pay

 

Once you have a clear, written policy in place, the next step is putting it into action.

sample holiday work policy downloadable guide

How to Manage Holiday PTO Fairly

Managing time-off requests fairly during the holidays often requires a mix of communication, transparency and creativity.

Here’s how to make it work in practice:

1. Communicate Often

When it comes to managing holiday PTO, proactive communication is key. Send reminders at least 30–45 days before major holidays, restating your policy and deadlines for submitting vacation requests.

  • Hold a quick team meeting or send an email outlining blackout dates, staffing needs, and your holiday call-out policy.

  • Remind employees that early requests have the best chance of approval.

  • If you must deny a request, be clear, consistent, and kind—employees are more likely to accept a “no” if they understand the reason behind it.

Open communication keeps everyone aligned and reduces last-minute scheduling stress.

 

 

How to effectively manage vacation requests

2. Create a Shared Holiday PTO Calendar

Visibility prevents conflict. A digital calendar showing approved holiday PTO helps employees see available dates and plan accordingly. Tools like Outlook, Google Calendar, or your HRIS can make this transparent and self-service.

Encourage employees to check the calendar before submitting PTO requests, which helps eliminate overlap and simplifies manager approvals.

Pro tip: Post this calendar in a shared workspace (virtual or physical) and finalize all confirmed dates before peak holiday weeks.

 

RELATED: How to Deny an Employee PTO Requests >>

3. Offer Incentives for Flexibility

Even with planning, conflicts arise. When two employees want the same holiday week, incentives can encourage flexibility and goodwill.

  • Offer an extra PTO day in January for employees who work during the holidays.

  • Allow flexible scheduling or partial remote work for those who adjust their vacation dates.

  • Provide small bonuses or public recognition for team members who volunteer to cover shifts.

These gestures show appreciation and help keep morale high while managing holiday PTO equitably.

 

RELATED: Ask the Expert, How Does FMLA Work During the Holidays? >>

4. Keep It Simple and Fair

Fairness fosters trust. Many small businesses use a first-come, first-served approach or rotate popular time-off weeks annually. Whatever method you choose, apply it consistently across departments.

Avoid favoritism or ad-hoc decisions. Instead, document your approach and refer back to it when questions arise. This helps prevent resentment and ensures every time off request is handled transparently.

 

5. Understand State and Federal Leave Laws

Understand State and Federal Leave Rules

While holiday PTO is typically discretionary, some leave protections may apply. Stay current on federal, state, and local laws governing paid sick leave or mandatory time off for religious observances.

If an employee requests holiday time off for religious reasons, those requests must be handled under Equal Employment Opportunity Commission (EEOC) guidelines to ensure compliance and fairness.

If you’re unsure how these regulations intersect with your holiday call-out policy, Axcet HR Solutions’ certified HR consultants can help review and update your policy to align with best practices and legal requirements.

Axcet’s Support for Small Businesses During the Holidays

The holidays should be a season of celebration—not scheduling chaos. Axcet HR Solutions, a certified professional employer organization (CPEO) headquartered in Kansas City, helps small and mid-sized businesses streamline holiday PTO management, handle employee time off requests fairly, and stay compliant across multiple states.

From drafting clear vacation and holiday call-out policies to navigating complex PTO disputes, our team of certified HR and payroll professionals provides expert, real-world guidance—so you can focus on running your business while we manage the details behind the scenes.

See if a PEO makes sense for your business

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