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Payroll, Human Resources, Benefits, and Time & Attendance are some of the services we provide. You can rely on our 40 years of experience coupled with the latest technology to custom build a service that is tailored to your company's needs.

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      2 min read

      Simplifying Your PTO Policy: The Pros and Cons of PTO


      Leave policies depend entirely upon the integrity of the company and the person drafting them, and options abound. A more traditional time-off policy allocates days for sick leave, vacation days, and personal time off. However, paid time off (PTO) policies are growing in popularity. What is a PTO policy, and how do you know if it’s a good fit for your organization?

      What is a PTO policy?
      A PTO policy pools all vacation, sick, and personal days into one general category- paid time off. A well-written PTO policy will include guidelines regarding who is eligible for PTO, how it is accrued, and how much is available to the employee. The policy should be constructed to reflect the values and culture of your company and align with your company’s HR strategy. Most importantly, don’t short-change your employees by offering fewer days off than they might have had under a more traditional structure.

      Why should you consider a PTO policy?
      Some contend that a PTO policy goes further than traditional models to treat employees with respect and trust, allowing them to utilize days off without having to justify the reason. As a result no one; employer, or employee, is concerned about whether the day was spent in sickness or leisure.

      Generally speaking, a younger workforce may appreciate a PTO policy more than a traditional structure. It may even encourage them to take a job that offers less money but greater flexibility in time off. Additionally, newer and younger employees alike may consider a PTO policy to be fairer, ensuring everyone gets the same number of days at the same accrual rate and can use them in the way that best fits their lifestyle.

      A healthy workforce with mostly healthy families may also appreciate a PTO policy as they can use what might be designated as sick days to be vacation days instead. It can also be advantageous to those needing to take an additional vacation or personal day but only has sick leave left and calls out “sick” at the very last minute, leaving other employees in a lurch.

      What are the drawbacks?
      Flexibility and freedom can be helpful, but it can also be problematic for employees due to the unpredictability of sickness. One cannot foresee when they might be sick or for how long, or whether an unexpected life event will require their time. Planning for the unexpected is impossible, and if an employee doesn’t leave margin, it could leave them without time off when they most need it. In worse cases, employees will come to the office sick, putting others at risk.

      Without defining the structure of vacation days vs. sick days, employees with families may experience an impulse to save every day for the “just in case” family emergency. They may choose not to take a vacation when they should, causing resentment and burnout to fester. The lack of structure may also lead employees to consider all PTO as vacation time, which may in some cases mean an employee takes fewer days off. Some cultures are better than others at taking vacation time. A good PTO policy should add benefit to a healthy work-life balance, not detract.

      One way to mitigate these negative possibilities is to include guidelines and guidance for the PTO. Leading people through the possibilities and options will help them make the appropriate decisions when the time to take leave occurs.

      Find what works.
      In a perfect world, employers wouldn’t need to police an employee’s days off, whether to verify or to preserve; however, it is the employer’s responsibility to create a productive and safe environment that meets the needs of your workforce. A PTO policy may be most appropriate for newer enterprises with younger workforces as older, more traditional workspaces tend to be averse to this kind of change. Evaluate the culture of your organization, your vision for its future, and then evaluate whether a PTO policy would best support that culture.

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      The Costly Consequences of Payroll Mistakes

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