Developing a Personalized PTO Plan for Your Business
According to United States Federal law, employers are not required to provide paid time off to their employees. However, many employees and workers feel that it is preferential to work at a company that offers PTO in some form. If given a choice to sign on with a company that does not offer PTO, potential employees may choose to explore other options if they are available. A good PTO plan boosts morale and encourages potential employees.
When constructing your company’s paid overtime plan you will find there are relatively few laws governing how it should be put into place. On the one hand, this is a good thing because it allows you to be flexible in the development of your plan and find something you feel works for your company on an individual level. However, it can also be overwhelming as there is no clear guide or structure to follow when setting up a PTO plan. This article will serve as a guide to help you as you start to think about developing a unique PTO plan for your company.
Generally speaking, there are two distinct types of PTO available to employees. The first type of paid leave is a long term and designed to provide employees with relief and support while dealing with major events in their lives. This includes pregnancy, death of a family member, major injury, or legal obligations such as jury duty. This category of PTO is designed with the understanding that it will only be used once or twice over the course of an individual’s turn of employment. As such, setting up a structure and guidelines for this type of paid time off is relatively simple and straightforward.
A second type of PTO is more varied. It is designed to provide for short term absences. These are the kinds of things that crop up suddenly and need to be dealt with. This includes things like holidays, sick days, vacations, and personal time. Generally speaking, the idea is to provide workers with a set number of days and allowed them to choose which situations are a valid use of their allotted PTO.
Because of the first category of paid time off is so straightforward and the second category is so varied most of the suggestions listed below will be relevant only to the second category of PTO.
One method of increasing popularity is to provide each employee with a single block of all purpose PTO days to pull from. This is referred to as a PTO Bank, since days are “stored up” and then withdrawn at the employees discretion. This is useful for a number of reasons. For one, it is straightforward and efficient requiring little regulation and management.
In addition, it allows employees a level of discretion. The employer need not embroil themselves in the lives of their employees and the workers, in turn, do not have to feel that they must justify themselves to their employer by divulging personal information which they might otherwise prefer to keep to themselves.
Using this method, as long as a worker is responsible in their use of PTO they can apply their time off to any situation that arises without having to explain their motivations or personal situation. It is also good for the employer because it takes judgments and personal feelings out of the equation. If an employee has no paid time off left in their bank than they cannot use it, no matter the situation. It creates an efficient and reliable system on which to determine individual PTO requests.
It creates a sense of equality and fairness among employees and reduces the number of false sick days, which occur when workers are given a set number of sick days which they do not use for their intended purpose.
It is also important to consider whether acquired days of PTO should be paid out or carried over if gone unused for long periods of time.
Typically a payout is received when an employee leaves a company. If the employee did not take advantage of their allotted PTO then the amount that would have gone to cover their time off is returned to them in a bulk sum. Depending on the employee, this can result in rather large payouts to individuals that are no longer working at the company. However, it also reinforces good attendance since employees who operate under a “use it or lose it” type of system are more likely to take days off that they do not need.
Choosing which categories and methods to use is a decision that each workplace will have to make on its own. However, this article hopefully provides some good ideas to help you build a base for your new PTO structure.
Article provided by NECHES FCU, an Equal Employment Opportunity Employer.
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