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December 2021

Frequently Asked Questions About Designing a Paid Time Off Policy

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According to research, absenteeism costs employers $225.8 billion every year, but employees coming to work when they are sick may cost employers even more. One way to combat both issues is to create an effective paid time off policy for employees. If you have never designed a PTO policy before, these frequently asked questions can help you get started, presented below by Business E Suites.

What Is Paid Time Off?

Paid time off may refer to any kind of paid leave program, but usually indicates a program that gives employees a set number of days to use for any type of leave instead of separate days for vacation and sick time. In most systems, employees earn a set amount of PTO for each hour or day that they work.

What Are the Benefits?

Offering a robust benefits package is a valuable tool for distinguishing yourself from other employers that might be offering similar wages. It sends a message to employees that you care about their well-being and can help you attract and retain top employees.

PTO programs are more flexible than traditional leave policies.  These policies also eliminate the need for employees to explain to employers why they need a day off. This both reduces dishonest use of “sick days” and protects employee privacy. Because there is no need to track different types of time off, a PTO program can reduce the work required by the human resources department to track it.

What Are the Disadvantages?

Because PTO policies do not allocate a specific amount of days for sick or vacation time, some employees may come into work sick because they want to save their days off for other uses. PTO policies can also be more expensive if you operate in a state where you are required to pay employees who leave their jobs for unused vacation time, but not for sick time. Because PTO policies do not distinguish between the two, you may have to pay for all of the PTO time the employee has accumulated but not used.

Do I Need a Written Policy?

A written PTO policy is important for avoiding misunderstandings. Your PTO document should clearly explain exactly how your PTO program works, how employees can accumulate, use and schedule their time off and what happens if employees miss work after exhausting their PTO days.

The document should be well-formatted, professionally presented and signed by the employee and a representative of your company. Portable Document Format documents can be a useful medium for presenting PTO policies, but if you need to send large PDF documents to remote employees, the file size may be problematic. Using a PDF compressor tool can help you reduce the file size without losing the formatting of the document or degrading the quality of the images.

Who Can Help Me Create a PTO Policy?

If you are just getting started with your first employee, you probably do not have a dedicated HR department to help you. Consider hiring a business consultant. Online job platforms are a good place to search for potential candidates. The average marketing consultant hourly rate is between $28 and $98 per hour, depending on the experience level of the consultant. Make sure you read reviews and consider the price versus the services being offered and the promised delivery time.

Paid time off programs have both advantages and disadvantages when compared to traditional leave programs. When choosing what type of program to offer, consider which programs fit the best with your company culture and resources.