PTO Policy

How to Create a PTO Policy That Works for Everyone

Personal time off (PTO) is a critical benefit to offer employees who come to work for you. Employees appreciate the chance to take some time off work without losing out on their pay, and employers can benefit from re-energized employees who return from their time off more focused and productive than they were before.

What is PTO?

PTO stands for paid time off, and it literally means the time that employees are allowed to not be at work but still receive pay as if they had been at work. Employees have increasingly come to expect that this benefit will be provided to them, and employers feel that they have few options but to offer this type of benefit given how prevalent it has become across all kinds of jobs. Fortunately, there are upsides to offering PTO for employers as well. They receive a workforce with boosted morale, boosted productivity, and a better attitude.

Types of PTO

There are some standard forms of PTO offered across businesses of all kinds throughout the country, and then there are alternative models used by some companies to try to attract more employees or a certain type of employee.

Rollover PTO

Many companies assign a certain number of PTO hours to each employee to use for the entire year. The amount of hours that a certain employee receives is often based upon their years of service to the company. The longer that they remain employed, the more hours they receive.

If the employer decides to, they may allow employees to roll over their unused PTO hours in order to build up a large collection of those hours for use later. In other words, if an employee is granted 40 hours for the year, but only use 24, then they may be permitted to roll over their remaining 16 hours into the next year to add to their balance. This system is considered to be the fairest way to do things by most employees.

Use Them or Lose Them

A policy may dictate that PTO hours are granted on a “use them or lose them” basis. Under this model, employees must use the hours that they are granted at the beginning of the year before that year expires, or else they lose those hours entirely. In some cases, an employer may simply pay the employee for their unused hours, but that is not always the case. It is important to check your employer’s policies very carefully.

Unlimited PTO Hours

Some companies (such as Twitter) have taken to an unlimited PTO approach for their employees. They are welcome to take as much time off during the year as they deem necessary. Employees are meant to police themselves with this, and they tend to do a very good job of it.

Policy Examples

A few things that you may see when you are reviewing the PTO policy for the company that you work for include:

  • The number of hours received – You should have access to the number of hours of PTO that you will receive based on your years of service. There should also be details about when those hours renew. This may be on the anniversary of your employment or on January 1st of each year.
  • How many hours (if any) may be rolled over – This should explain in detail how many hours you are permitted to roll over (if any)
  • Special circumstances that qualify for additional hours – There may be some language in the policies about when you can receive additional PTO based on extreme circumstances such as a death in the family or a true medical emergency.

Best Practices

Each employer will need to decide for themselves how many PTO hours to grant and in what format. Generally speaking, employees prefer when policies are made to be as flexible and reasonable as possible. They like it when they are trusted to manage their own time and when they receive a reasonable number of hours from their employers. They also prefer rollover policies that allow them to collect more hours if they choose not to use the amount that they are allotted, to begin with.

The most important thing for an employer to remember is that all employees must be treated fairly and equally. If they can develop a policy around that, then they are headed in the right direction.

Please contact us for more information on how to create a PTO policy that is ideal for your specific needs.

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