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Published March 11, 2021 in Insights

When should I offer PTO to employees?

If you’re an employer, you know how important paid time off is to your employees. You have single-handedly witnessed the happiness in your employee’s faces the day before their PTO begins. Or how rested they seem after a well-earned vacation. Well, as you probably know, a vacation is not the only reason behind paid time off. Sometimes, it may be hard to recognize whether a request for time away from the office qualifies for paid time off. 

If you could relate to the last paragraph, rest assured, we have compiled a list of scenarios of when to offer paid time off to employees. But, before we begin, let’s clarify where labor laws stand on paid time off.

Most employees can take up to 12 weeks of leave per year. However, the Fair Labor Standards Act (FLSA) doesn’t require employers to pay for that time off. This leaves it up to the employer and employee to negotiate paid time off. 

Well, Vacation

We already spoiled the most common reason for taking paid time off. Employees cherish their vacation days like precious pearls, and carefully plan their whole year around them. In fact, their partner and children also plan their year around it. Your main takeaway from this is that you should never underestimate the power of a vacation. In fact, when asked, employees deemed vacation and paid time off as more important than a pay raise.

It may sound absurd to pay for your employee to drink piña colada on the beach, but research shows that it is in your best interest to do so. It seems that offering paid time off reduces employee absenteeism. In fact, paid time off reduces unscheduled absences by 8%. If you offer paid time off, employees will plan this time off carefully and notify you in advance, so you’re not caught off-guard by any last-minute absences. If you’re not convinced, consider this statistic: Absenteeism is costing US employers around $1685 per employee.

After all, your employees will be eternally grateful for that paid time off, which will give them a boost in energy and morale. Happy employees, happy customers!

See Related: Exploring 3 Strategies that Boost Work Performance

Sick Leave

sick-leave-and-PTO

People are most stressed when faced with a medical complication, whether personally or in the case of a family member. You have probably been there yourself, and know that it can really bring you down. Now, who wants a drained and stressed-out employee? It’s not good for them, and it’s not good for business.

If you haven’t already, you should really consider a paid sick leave policy. Sick leave is tricky because you can never predict matters of health. One can’t foresee an illness, how long it will last, and how much damage it will do. That may scare you off as an employer. We understand. 

But, we believe paid time off can make it better. While we talked about absenteeism early on, there is an equally scary term called presenteeism. If there’s presenteeism at your company, this means that employees are showing up even when sick or injured, making them more likely to make mistakes and be forgetful. You guessed it already - that’s also bad for business. In fact, it costs US firms a shocking $226 billion a year. 

Offering PTO to an employee in distress will have a positive impact on their health. They will focus their efforts on resting and getting well, instead of pretending to be working on the job site. You will also avoid a chain effect of the employee getting even worse because of stress, lowering productivity, and increasing absences. 

If you don’t believe us, look at the expert evidence. A lengthy study showed that long work hours may actually increase risks for heart disease. Additionally, American psychologists are continuously telling us that time off produces many positive effects on our mental wellbeing. 

See Related: Staying Safe and Productive in the COVID-19 Pandemic

Get Creative with It

Paid time off doesn’t have to be such a dull topic, resembling a dark cloud ruining a sunny day. Your paid time off policy shouldn’t cost you more than you can afford, either. We already established vacation days and sick leave as the foundations of any paid time off policies. The rest is honestly up to you. 

If you’re not clear on what we mean by it, hear us out. What’s a paid time off policy that is easy to adapt and will not cost you a fortune? 

Employee Birthdays

This can be paid time off on your employees’ birthdays. After all, an employee can only have a birthday once a year. Many companies are giving employees paid time off on their birthdays as a token of appreciation for their hard work. As employee birthdays are easy to track and verify, this will come at minimum administrative costs to you. This may be especially smart if you are trying to recruits millennials in your company, they are known to appreciate a thoughtful company culture

Weddings 

As your employees settle down and spend many years at your company, you may actually witness their marriages. A wedding day has a lot of sentimental value to those getting married. If you want to outdo other companies and truly show your employees that you care, having a wedding day PTO may go a long way. Chances are, your employee will use vacation days for the honeymoon, so you can contribute that extra day on their special day. What’s a better wedding gift?

Seek Help

help-with-PTO

If all administrative decisions were made without the help of anyone, the simplest tasks would take forever. Chances are, you are not the only business owner that has wondered about what constitutes paid time off. Businesses are increasingly seeking help from algorithms and technology to help them in their decision-making. They’re fast, accurate, and let your team focus on other important matters. It turns out that managers aren’t the only fans. The transparency of these apps seems to also make employees happier.

Apps like Atto help you keep track of PTO and even create timesheet reports on your behalf. These reports will be your guide, including detailed information on each employee’s regular time, overtime, break time, and paid time off. And it gets better. 

The app has released a feature where employees can apply for a vacation at the click of a button. The admin, usually the HR, can then send a response on the app and notify the employee whether time off has been approved. If a time off request is approved, the admin is free to decide between PTO and unpaid time off. 

Remember those timesheet reports we mentioned earlier? Those will automatically include information on all this activity, whether the time off was approved or not, and whether it was paid and unpaid. This takes the burden off of management’s shoulders by making information readily available when it’s most needed.

See Related: Best Time Tracking Apps for iPhone in 2021

As always, you know best what fits your company culture. These are just some ideas that we have collected from our community. What are yours?

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