What is the benefit of a paid time off policy

Dorothy · June 2002

vs a sick leave policy and a vacation policy?

Don D · June 2002

A paid time off policy, if I understand your question, combines a variety of types of paid leaves into one discretionary bank. Easier to administer, not as restrictive, and doesn't encourage misrepresenting the truth.

dhnyct · June 2002

AMEN.....Be sure to consistently relate to ee's that PTO is for vacation/sick/personal, NOT just "Vacation" time.

moneyman · June 2002

Very succinctly said. We have used the PTO for years and the biggest comment that we received is that it gives the "healthly" employees more benefits. Prior to that, we had 6 days in a 12 month period and if you did not take it, you lost it. We found that it encouraged people to schedule at least a few sick days in order to take advantage of this policy. We did not have a reward system for people who did not take sick days, so why not get a few paid days off. Since we have changed, this allows the people to take additional personal time away or even an additional vacation if the department schedule allows it.

sonny · June 2002

Another question along these lines. . we are looking to go from a VL and SL set up to a PTO program. It has been mentioned that it is easier to administer, but one of things we have been pondering is related to FMLA. As it is now, SL is noted on time sheets and that can trigger FMLA notification. With a PTO system, have any of you had problems identifying FMLA cases? If so, solutions?

moneyman · June 2002

Being a small-medium employer, we know every individual and generally know what is going on. In larger companies, where you may not know each individual as well, there might be problems. Still, our main practice/procedure/policy is to make sure that our supervisors are educated enough, so that when they have employees reporting in to them, they will route anything that is suspect to the HR department. If someone calls in and says their child has the flu and they are taking them to the doctor, that would not be reported to HR at that time. However, if they call in to say that their child went into seizures and that they are in the emergency room, that would merit a quick note to HR who would then check up on it when the employee returned to work. Not fail safe, but it has been effective for us.

Hatchetman · June 2002

[font size="1" color="#FF0000"]LAST EDITED ON 06-19-02 AT 10:21AM (CST)[/font][p]Sonny, if you want to track FMLA time while the person is using paid "personal time off" or paid vacation time, change your coding systme. I don't know what codes you sue, but add codes that reflect FMLA and the paid time benefit that is being used.

If you have a computerized timekeeping and payroll system, then of course, your IT team has to get involved. If it's manual, you can probalby just issue instructions on coding the time card.

We do it.

sonny · June 2002

Thanks. .I like the idea myself, but we are getting some resistance..mainly I think, cuz "it's always been this way". We will have to figure out some issues. .ie right now we cap vacation at 400 hours, ST is not capped; you can cash out a portion of SL annually etc. vacation only when you leave etc. This all has been helpful. Will keep working at trying to get folks out of their current mindsets. Thanks again

Don D · June 2002

T E N WEEKS OF VACATION???????

Rockie · June 2002

Combining sick & vacation into PTO greatly cuts down on the use of sick leave and its abuse. Most employees think about it more if they know that this will cut down on their vacation time off. Some companies have even factored in holidays into PTO time, but I wouldn't recommend this. It makes employees feel like they really don't have a holiday off without it coming out of their bank.

pollypop · June 2002

What provision do your policies contain for advance notification of using PTO? For instance, if an ee has 15 PTO days available, can he wake up on 15 mornings during the year and decide to "call in" to use a paid day off?

Rockie · June 2002

Pollypop:

No, PTO should be approved in advance by the supervisor; otherwise it is what we call an unscheduled absence and can count against their attendance if deemed excessive.

sonny · June 2002

Don. .LOL yep, 10 weeks AND there was NO cap until a couple of years ago. Part of the rationale was that we have no STD and LTD did not kick in for 6 months so folks needed ST and VT accrued should they become ill. Nice little nest when you retire, heh?

MBAPTOstudy · September 2002

To All in PTO discussion,

After combing through the net I was most overjoyed to fall upon your discussion of PTO pros, cons, and stories. My name is Zach and I am a University of Maryland MBA student in the midst of conducting a study on PTO. It's a group study, some members of my group will interview firms for best practice analysis, another 2 will do an analysis for cost savings potential of switching over to a PTO program via looking through some financials, and I and another will investigate different state regulations concerning the PTO program. Thus, I turn to this distinguished forum for any helpful word of wisdom as to where would be a good place to look for a comparison study for state employment laws as they relate to the PTO program. A web site, name of a company, or any explanation would be most appreciated. I would be happy to share results of our paper with this forum if it is requested. Thank you for your consideration, and I look forward to participating in your forum again.

Zach

Ty · September 2002

Rockie is it possible to get a copy of your PTO policy

Rockie · September 2002

Ty: Send me your email address and I will be happy to send you a copy of our PTO policy.

Lori B · September 2002

I agree that PTO is easier to administer and has lots of benefits. Watch out for drawbacks though. For ex, you might be increasing your exposure for payouts when people terminate. In Illinois, PTO banks are simply treated like vacation pay. If someone terminates with accrued but unused vacation pay, it must be paid out. This rule does not apply in our state for sick time. If you combine sick and vacation in a PTO bank though, you must pay it all out. You need to weigh the pros and cons of increased cost of estimated payouts vs. cost saved in easier admin, etc., before blazing ahead.

MBAPTOstudy · September 2002

Lori,
Regarding your comment about watching out for combining sick leave and vacation time in a PTO bank and upon termination in some states being forced to pay the employee the full amount of time, would the following structure avoid that situation?

-Presenting the PTO as a bank but distinguishing between sick leave and vacation leave for a total of let's say 10 days
-Sick leave is assigned 50% (5 days) and Vacation leave 50% (5 days)
-The total of 10 days may be used at any time (if at least 24 hours notice is given employee is only charged .8 of a day) BUT the first 5 days from the PTO Bank used in a given year will IN ANY CASE be counted as VACATION LEAVE
-Therefore, if an employee leaves midyear from the company and has used 5 days from his/her PTO bank the remaining 5 days would be counted as 5 SICK DAYS and would NOT be paid to the employee upon termination or quitting
-If employee has used all 10 days and has given proper notice (for this example let's say 24 hours) .8 of a day would be charged for each day taken. Therefore the employee have 2 days of VACATION BONUS. Only a full day may be used (not a fraction of day). Any time left of bonus time for proper notice upon termination would be paid to the employee

Would this be a sellable idea to the employee? Would this conform to wage and labor laws? Considering your example of IL (and other states like CA) this idea seems to work across states that might have disparate time-off provisions. Please let me know what you think. Also, if others in your forum have a comment, please do share it. Thank you!!! Looking forward to participating in your forum and sharing our group's research when we finish the paper in November.

Don D · October 2002

I disagree with the suggestion offered by the MBA candidate, but, I salute him/her for coming up with that 'Swiss Watch'. The main reason to have a PTO program is to get away from distinguishing among the types of leaves. If you call it PTO and then force upon it the separate tracking and management of various types of leaves, you have arrived back at the square one you had hoped to depart from. The program you lay out is entirely too complex for employees to understand, including the employees who will be expected to administer it. But, it should get you a B. x:-)

Lori B · October 2002

I agree with Don. The only way to avoid the problem I cite for Illinois is to ensure that sick hours are not hours that can be used for any reason like vacation. This means separate tracking no matter what you call it.

MBAPTOstudy · October 2002

Zach replies:

Thank you for your feedback. After researching state law in the Wash, DC area it definitely is apparent that the suggestion I had above would not be allowed. Have you or your colleagues ever tried incentivizing employees with bonus time off if they give proper notice for using their PTO?

For example:
-Your company originally gave 21 days off per year (total of vacation, sick, personal)

-BUT with PTO implementation your Employees NOW receive 15 days off per year (vacation and personal 9 days, sick 6 days in a PTO account)

-If employee gives proper notice (24 hours prior) AND does not take a sick day off before or after the day after a scheduled day off the employee will receive a .5 day bonus

-If all 15 days of vacation and sick leave are taken with proper notice and following the above bullet point's sick guidelines the employee can earn up to 7.5 bonus days off

-A maximum amount of leave for the year would be 22.5 (the 7.5 bonus days off will be considered vacation time and if proper notice is not given a PTO day will not be paid but a day off without pay, no additional bonus time would be given for proper notice when taking these 7.5 days off)

The net is more days off, and hopefully less absenteeism, greater retention and more notice with less overtime b/c of double scheduling a replacement employee with overtime. Will it work?

I'm trying to move from a B to an A!!!!!! Would this sound more logical and ethical? Thanks again for your mentoring. Please provide any feedback, I would most greatly appreciate it.

Zach

Don D · October 2002

Zach: My man, you are getting entirely too anal with this thing. Please go with a more sensible approach to the creation and management of things in our HR world. We have tons of federal and state regulations to sift through, digest, memorize and operate from, not to mention each of us having our own in-house company manuals to work from. We have to accurately regurgitate all that on a daily basis. Now, if your class had been given the assignment "Create the most complicated leave system you can", you are well on your way. The Forum will give you an 'A' if you come up with something easier, more manageable, that actually makes sense to the business world and (bottom line) accomplishes something. Our walls are already covered with 'HR cheat sheets' as it is. We won't have room for the 4x8 sized guide your plan will require. (I am your friend. I actually have a son in an MBA program, but I will kick him out of the house if he gives me something like your plan x:-)) Not really. Don

What is the benefit of a paid time off policy

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