Employee Paid Time Off Policy (PTO) [Examples]

Employee Paid Time Off Policy (PTO) [Examples]

Are you trying to find a solution to employees missing work now and then? Instead of dealing with employees’ leave requests and endless salary deductions, you can implement a paid time off policy in your organization. This way, employees can take paid time off without having to put their jobs at risk.

In this article, I’ll show you what a paid time off policy is and the benefits it offers. As a plus, you’ll learn possible downsides and some statistics that show what the workforce in America feels like regarding paid time off work.

What Is a Paid Time off Policy?

A paid time off policy is a number of days that employees receive every year, with the purpose of taking time off when they need to. The policy works by combining sick time, vacation days, and personal time into a single number of days. It is important to know that the number of days received will vary depending on the employees’ length of service.

When a worker needs to run errands, get a general medical check-up or anything that requires times off work, they can use a day from the PTO policy to miss work. An important part of a PTO policy is that employees can use the paid time off policy at their discretion.

How Does the Paid Time off Policy Work in the U.S?

Paid time off policy is not a legal requirement for employers in the United States. That said, there are many companies that decide to use it as a yearly benefit for their employees.

How do the majority of companies implement the paid time off policy?

First of all, if an employee needs to take some time off, they have to request it with a two-day notice at least. However, sick days are an exception to this rule.

Also, some companies use the time employees have been in the organization as a base to decide how many paid time off days they will have in a year.

Since this is not legally mandatory in the U.S, there isn’t an established number of days that all companies should stick to.

How Do the Majority of Companies Implement the Paid Time off Policy?

According to the Society of Human Resources Management (SHRM), 87% of companies in the United States implement the paid time off policy. The average paid days off employees have per year ranges between thirteen and twenty-six.

Another study, WorldatWork shows the number of paid days off that employees receive in a year according to how long they’ve been working with the organization:

  • Less than one year: an average of 16 days.
  • One to two years: an average of 18 days.
  • Three to four years: an average of 19 days.
  • Five to six years: an average of 22 days.
  • Seven to eight years: an average of 23 days.
  • Nine to ten years: an average of 24 days.
  • Eleven to fifteen years: an average of 26 days.
  • Sixteen to nineteen: an average of 27 days.
  • More than twenty years: an average of 28 days.

As you can see, most companies that offer PTO policy as an employee benefit offer at least 16 days for new staff members. The longer employees stay in the organization, the more time they should receive as part of your paid time off.

What Are the Occasions Included in a PTO Policy

The specific days that a company offers as part of PTO policy varies from organization to organization. The one category that every company seems to allot to employees in all the cases is vacation time.

Here are the categories that WorldatWork found in their surveys:

paid time off stats

As the image shows, the categories that the majority of companies include in their PTO policy are vacation time, holidays, jury duty, bereavement leave, and sick time.

The rest of the categories, such as military leave, personal time, and community service are not offered by most companies.

What Are the Advantages of Implementing a PTO Policy?

Management should recognize employees as functional adults with a personal life outside work. This means that employees should be able to use PTO at their discretion if they need to solve any personal business not concerning their manager. When a company gives employees the autonomy to decide when they need time off, employee engagement levels are more likely to increase.

As companies adopt new management styles, PTO policies become more common. Since flexibility is an important part of the overall employee experience, workers tend to feel better knowing they have some days off to take care of personal matters.

Moreover, by increasing employee engagement and encouraging flexibility, employee turnover rates tend to stay low.

A human resources information system also makes human resources’ job a lot easier when a PTO policy is implemented. Just by inputting the information in the HRIS, HR managers can schedule employees’ time off and avoid making tedious calculations regarding salaries’ deductions.

Disadvantages of Implementing a Paid Time off Policy

One of the main disadvantages of combining sick days, vacation time, and personal time is that some employees prefer to come to work sick. That’s because nobody wants to waste “vacation” days being sick.

This can have a negative impact on employees’ performance and on their co-workers’ productivity.

Paid Time off Policy Statistics

These statistics are provided by the Society of Human Resources Management (SHRM).

  • An employee’s time of service appeared to have almost no impact on paid sick leave (9%) as well as personal leave plans (14%). On average, paid sick leave days not based on time of service resulted in eleven sick days for full-time workers and seven sick days for part-time workers.
  • An average of four personal days was allotted to full-time and part-time workers for plans not based on tenure.
  • On average, companies awarded mothers 41 paid days of maternity leave. On the other hand, fathers received 22 paid days of paternity leave.
  • The average number of paid days for adoption leave and surrogacy leave was 31 and 36 days, respectively.
  • Whereas almost 9 out of 10 organizations provided bereavement leave, very few allotted paid or even unpaid sabbatical programs. Moreover, less than 37% offered paid leave to vote that was beyond what’s legally required.

American’s Culture Regarding PTO Policy

The U.S. falls behind many countries when it comes to paid leave. According to a study published by CNBC, other countries offer as many as 28 paid days of leave.
chart
Yet it is true that the U.S. is not leading the top of countries offering paid time off, almost 90% of companies offer a paid time off policy as an employee benefit.
That said, American’s attitude towards paid time off is not similar to that of employees in other developed countries. According to the Washington Post, Americans seem to have an obsession with work. The reason for this varies from employee to employee, but the most common reasons are:
  • Some employees are afraid of losing their jobs while they are taking time off.
  • Employees are concerned about the way their workload will be handled while they are away.
  • Some employees are too engaged to take paid time off.

Not taking time off work is causing a serious burnout epidemic in the U.S. According to a Statista report, as many as 87% of adult workers have felt or are feeling burnout symptoms.

If you decide to offer employees a PTO policy, I recommend you encourage them to take days off so they can come back to work renovated and with energy to tackle all their responsibilities. Remember, you don’t want stress to become a factor that affects your employees’ performance at work.

 

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