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Pros & Cons Of Paid Time Off (PTO)

At the height of the summer season, companies’ vacation plans are often put to the test. If your company experiences frequent issues when trying to handle the mass influx of requests that come in over the summer months, it may be time to consider a Paid Time Off (PTO) bank as an alternative to a traditional vacation plan.

Depending on an employer’s specific employee population, PTO may or may not be the right fit for their organization. We’ve outlined a few of the advantages and disadvantages that come with implementing a PTO policy.

The Pros

With a PTO bank, all vacation, sick, and personal days are integrated into one stockpile, so employees can use the time as needed. Employers of all sizes are testing the PTO bank concept and many are pleased with the result.

Experts cite several advantages to PTO banks:

  • Ease of administration. The PTO bank is often easier to administer because it folds together vacation, sick time and personal leave.
  • Control over absences. When various types of leave are separate, employees are sometimes tempted to use sick leave granted to them whether they need it or not. With PTO banks, employees tend to save time off to use for vacation.
  • Recruitment and retention. Employers are finding that PTO programs can make their companies more competitive when recruiting employees.
  • Flexibility. The value of PTO banks is especially vital in industries that operate 24/7, such as the healthcare industry, because it offers optimum flexibility.
  • Diversity. Today, employees celebrate a variety of holidays. PTO banks reflect a company’s respect for employees’ diversity by allowing them to schedule time off around their holiday calendar.
  • Privacy. While most employees don’t want to lie to their employers, they also may not want to announce that they are chaperoning their first grader’s field trip or taking a mental health day. A PTO bank allows employees to take time when they need it without having to explain it.
  • Equity. There’s a perception by some that employees with children receive more time off than single people without children. PTO banks level the playing field. Everyone has access to time off based on service, so it’s objective.
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The Cons

There are however, some disadvantages employers should be aware of when considering making the move to PTO:

  • Higher volume of requests. Employees tend to take more days off under a PTO arrangement, which may impact scheduling or staffing needs.
  • Resistance to using PTO as “sick” time. Employees who view PTO as “lump sum” vacation may choose to come to work when they are sick, rather than spending a coveted PTO day they were planning to use as a vacation day.
  • No safety net. Unless PTO requests are closely reviewed by managers, there is the potential that an employee could use up all of their PTO before the end of the year, leaving them without a safety net in case of a personal or family illness or medical emergency.
  • Carryover. When making the switch to PTO, deciding how previously accrued vacation or sick time will fit into the new policy can be tricky.

All things considered, PTO is a viable option that works well for many companies and can be an attractive alternative to traditional vacation/sick paid leave policies, but may not be right for every organization.

Ready to make the switch, but need a little guidance? G&A Partners can help. As a leading provider of outsourced human resources services, G&A’s team of experienced HR professionals are experts in designing and implementing effective employment policies, including PTO and other leave arrangements. Combine the expertise of our team with the scalability of our easy-to-use time and attendance platform, and you can see why our clients say we’re the perfect partner for their growing business. Call 1-866-634-6713 or visit today to schedule a free consultation with one of our business advisors today!

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This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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