4 Tips for Employer Paid Time-Off Plans

The Importance of Paid Time off Plans and How to Implement Them

Employers know that employees need breaks from work occasionally. It is for that reason that organizations offer their employees paid time off (PTO). They offer PTO in the form of vacation days, holidays, sick leave and personal leave.


Paid Time-Off Plans

Companies adopt various types of paid time off plans. Some companies offer their employees a specific number of days for each type of PTO while others give a set amount of paid days off. In that case, employees can use the days off for many reasons. It is important for organizations to choose a plan that favors them.

What is paid time off?

Paid time off defines any time an employee does not works and gets paid a regular rate, fixed rate or prorated amount. Employers provide paid time off to employees to give them time to attend to non-work related issues. Despite the fact that time payoffs are a little bit expensive to companies, they still offer them to provide friendly terms to their employees as well as attract and retain employees.

How PTO works

Employees must get approval in advance to allow them to take planned days off, just like with the traditional vacation policies. Some employers have rights to deny or reschedule leaves or off days depending on their business needs. Most PTO plans do not require an employee to state the reason for taking leave. That is why most PTO plans do not demand medical verification when an employee takes a day off for illness.


Advantages of Paid Time Off

Advantages of PTO

The system is easy to implement especially for employers because they do not have to deal with many excuses from employees. An organization just needs to track a total number of days off. It saves on time used in following up employees and listening to their many excuses.

Another benefit is that employees find it flexible, and they like the freedom it comes with. That is because they are not expected to justify the need to take a leave or a day off. That means that they will not misrepresent reasons for being absent, and they will give notice in advance. Additionally, workers who do not use sick days will find time to meet their personal needs.

Four things to consider in determining PTO plan

As an organization, you need to put certain factors into consideration when coming up with an effective PTO plan.

Attendance patterns and costs

Consider the attendance patterns of your employees as well as the expenses. If your employees miss days for reasons not under sick leave policies and separate vacation like elder care, then your organization needs a PTO plan. In such a case, a PTO plan will be of great help because it will take care of various reasons for days off.

Organization culture and attitudes

The culture of an organization largely determines how well a PTO plan will function. If your organization is flexible and it delegates powers to employees to make decisions, then the method will work correctly. PTO plan does not operate well with agencies where managers retain tight control because managers will feel uncomfortable with the plans so they will resist them.


FMLA compliance

FMLA compliance

Compliance is importance when it comes to PTO plans. Therefore, if your company has problems tracking FMLA absences a PTO plan will make the situation worse. Businesses that have such problems in most cases are those where supervisors find it difficult to identify the absences that are important or which absences to count.

State laws on pay at termination

Organizations are required to comply with state laws. Some organizations have workers in countries, and they need payment of vacations they have not used at completion. If you are unwilling to pay for that, then using a PTO plan is not advisable.


Four tips

Four tips for implementing PTO plans

Most employers who adopt PTO plans find them favorable due to their flexibility. However, the process of transition from traditional plans to PTO plans needs to be done systematically to achieve results. If your company wants to switch, here are tips to make the transition swift and increase chances of success.

The organization needs to determine absences that will be covered by the plan. Additionally, companies should also set the total number of days. It goes a long way in making everything clear and outline everything.

An organization also needs to clarify how to handle unused days. Employees can use remaining days as sick days or have them carried forward and paid at termination. Make sure you explain the issue to avoid confusion.

It is important to come up with a procedure for identifying and certifying absences that meet FMLA policies. Most importantly, organizations need to educate their employees and supervisors on how PTO plans to function as well as their advantages.

Providing workers with paid holidays are essential, and the costs are not high for companies. When coming up with the program, you need to balance what you can afford and productivity loss as well as the compensation your competitors are offering.



Article provided by Neches FCU, an Equal Employment Opportunity Employer.
Neches FCU is a leading Texas credit union, with a highly respected team of professionals ready to provide service to their 45,000+ members. Daily, their core goal of “Ultimate Member Satisfaction” becomes the imperative for every staff member. They are respected for a very positive work atmosphere, where all clients are known by name.