The 4-day workweek is no longer just a buzzword. From the UK to Japan, pilot projects have shown that working fewer days can actually increase productivity, improve employee well-being, and reduce turnover.
But for HR leaders, the excitement quickly meets reality:
How do we redesign payroll, leave, and compliance policies when employees only work 4 days instead of 5?
Let’s break it down.
Global Momentum Behind the 4-Day Workweek
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UK Pilot (2022–23): 61 companies tried a 4-day week, and 92% continued permanently due to productivity gains and happier employees (BBC).
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Iceland (2015–2019): 2,500 workers reduced hours to 35–36 per week, with no drop in productivity and dramatic improvements in work-life balance (Autonomy Report).
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Microsoft Japan (2019): A 4-day week trial boosted productivity by 40%.
In the Middle East, the UAE made headlines by shifting to a 4.5-day workweek in 2022 (Friday half-day, Sat–Sun off). The question now is: Is the 4-day week next?
Payroll Redesign: Key Considerations
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Same Salary vs Pro-Rated Pay
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Most global pilots kept salaries unchanged despite fewer days.
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Rationale: employees are still expected to deliver the same output, just in less time.
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Community Question: Would you keep salaries flat or adjust them to reflect fewer hours?
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Overtime Calculations
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In a 4-day, 32-hour week → anything beyond 8 hours/day or 32 hours/week must be redefined.
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Challenge: balancing compressed work schedules (e.g., 10-hour days).
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Hourly vs Monthly Staff
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For hourly workers, fewer days could mean income loss unless hourly rates rise.
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Payroll systems must adapt to variable shift patterns.
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WPS & Compliance in the Middle East
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Wage Protection Systems (UAE, KSA, Qatar) require timely monthly payments regardless of weekly structure.
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Payroll teams must ensure alignment with banking cutoffs and MOHRE records.
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Leave Policies: What Changes in 4-Day Workweek?
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Annual Leave Calculation
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Traditionally: 20 working days = 4 weeks off in a 5-day structure.
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In a 4-day system, HR must clarify:
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Does 20 days mean 5 weeks off now?
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Or should it be recalculated as 16 days = 4 weeks?
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Sick Leave Impact
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One sick day = 25% of the week, not 20%.
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Policies need clear communication so employees don’t feel “penalized” for illness.
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Public Holidays
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Do holidays reduce from 5 to 4 per week?
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Some companies in global pilots kept holidays separate to avoid employee pushback.
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Leave Encashment & Gratuity
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EOSB (End-of-Service Benefit) in UAE/KSA is based on basic salary per day.
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HR must update formulas to reflect a 4-day week’s “workday value.”
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Balancing Productivity vs Policy
Global evidence suggests output stays stable or rises in a 4-day week. But policy misalignment could cause disputes:
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Employees may expect extra weeks of leave.
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Employers may want to compress hours instead of cutting them.
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Payroll errors could snowball if not redesigned carefully.
How HR Can Prepare
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Run a Payroll Simulation: Test salary, overtime, and EOSB under 4-day scenarios.
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Redefine working hours in contracts: 32 hours vs compressed 40 hours.
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Benchmark leave entitlements with market best practices.
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Communicate early and clearly with employees.
Community Manager.