“Sickness is the vacation of the poor.”
~ Apollonaire
Will you combine paid time off into one category or will you separate it out into sick and vacation time?
It is easier to categorize it all as paid time off only; if you use both sick and vacation time, you can potentially end up penalizing your employees with good attendance.
For example, if an employee never takes a sick day, they will use their vacation time and have no more available to take off.
If someone else uses all their vacation time, they may very well use their sick time as vacation time, and you will never know.
Nor do you want to know.
The reasons for someone’s absence are not really the business of management.
We don’t want to have medical information about our employees.
According to a study by the Erdlen Bogard Group, Inc. of Wellesley, MA, burn-out is seen by many work experts as a substantial cause of lost or declining productivity.
In addition, companies are realizing that the lifestyles of their employees require more time off.
They want to have extended leaves in the summer and winter.
If vacation policies are not competitive, employers will not attract high-caliber employees.
- Nearly every company offers two (2) weeks vacation after one (1) year of employment.
- 54% offer three (3) weeks off after 5-7 years on the job,
- while 38% furnish this benefit after only 1-4 years.
- 48% of those companies surveyed grant four (4) weeks’ vacation after 8-10 years,
- but 27% require 15-20 years of service.
- Five (5) weeks off is afforded by only 10% of the firms,
- with 87% requesting 15-25 years of employment first.
You may want to give bonus vacation weeks when an employee reaches his or her 10th, 15th or 20th anniversary year, or as a possible performance incentive.
With exceptions for management and executive personnel, the majority of companies use longevity as the basis for determining vacation time.
We recommend having one category of time off – Paid Time Off (PTO)
Any of which can be used for vacation, illness, personal appointments or religious holidays that are not covered in paid holiday time off.
There are a variety of elements that must be considered when crafting a paid time off plan:
- Will you combine paid time off into one category (recommended) or will you separate it out into sick and vacation time?
- Will it be accrued or awarded? That is, will time be accrued each pay period, and if so how much, or be awarded after a certain amount of service?
- Will vacation be administrated on a calendar year (prorated with everyone starting fresh in January or at the beginning of the fiscal year) or by anniversary?
- Can employees carry over any unused vacation time?
- May employees borrow any time that they have not yet accrued?
3 unexpected pitfalls of switching to a PTO plan
Posted in: Employment law – benefits, Latest News & Views, Pay and benefits, policies
Paid time off banks are very appealing these days, but buyer beware: Moving to a PTO plan can come with a few hidden pitfalls.
Here are some common problems and how to sidestep them:
State regs can bite you
- You may have to cash out unused days when you convert to a PTO plan. Some states require employers to pay out their workers’ earned, but unused vacation days.
- Tip: Check your state laws, and consider estimating that cost before you start planning a switch. Then you’ll know what you’re in for.
Handling accrued vacation time
- It’s also smart not to force workers to lose any vacation time they’ve accrued.
- Yes, you may save money if you do, but you stand to lose a lot more through reduced employee morale.
- Making such a move will, at the very least, make employees hesitate to buy into the PTO plan. At worst, it’ll have them poking around online job sites.
Buying/selling days
- It’s also best to decide in advance what your stance will be on workers selling days back and buying time.
- Offering employees the option to sell back their unused PTO days is popular, but it can get messy if they want to sell them to co-workers.
- Best bet: If you’re going to let workers sell unused days, have them sell their days to a general bank — not to individuals.
I encourage you to offer paid time off (PTO) instead of vacation, sick and personal days.
Not only is PTO beneficial in terms of administrative ease, it also provides an incentive for employees to not call in sick.
If you are considering changing your current vacation and sick time policies and implementing a PTO system, we suggest taking two-thirds of the total vacation, sick, and/or personal time which employees are currently eligible to accrue.
If you haven’t upgraded / updated your Employee Policy Handbook lately, consider Employee Manual Builder workplace policies handbook software from Jian
