Taking a sick day or requesting vacation is a thing of the past for many companies. In recent years, many companies are experimenting with paid time off (PTO) as opposed to the traditional vacation, sick and holiday benefits packages.
Unlike traditional benefits, PTO is a bank of hours that employees can draw from for a number of reasons, including taking a vacation, taking care of a sick child, going to a doctor’s appointment or needing a personal day off from work. Employers either credit the employee’s bank every pay period with a specified amount of time they can use, or credit the year’s worth of days at the start of the year. For instance, where traditionally an employer might offer 30 total paid days of itemized for specific purposes (10 paid holidays, two weeks of vacation, two personal days and eight sick leave days), they might instead offer the employee 30 total days available for the employee to use at his or her own discretion.
There are two ways to distribute PTO days. Some employers credit the full annual number of days to the employee’s account on Jan. 1. Others prefer the days to accrue throughout the year and deposit days each pay period. Using the example above, if an employer pays bi-weekly, the employee would accrue 1.3 days every two weeks. Or, if the employer pays semi-monthly, the employee would accrue 1.25 days at each pay period.
PTO plans generally work best in an environment that is already flexible in nature and is open to modified work schedules, as PTO plans promote a work-life balance by allowing employees to determine when they should take time off, and what they should use it for.
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.
If your company is considering implementing a PTO plan, there are several considerations to take into account:
The following factors are ones that should be considered when designing a PTO plan:
All in all, PTO is a viable option that works well for many companies and can be a beneficial alternative to traditional vacation and sick time off. So while PTO may not be right for every organization, it may be just the solution your business is looking for.
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 https://www.gnapartners.com/contact-us/ today to schedule a free consultation with one of our business advisors today!