PTO Banks
RSIHR
5 Posts
Can anyone tell me where to find comparative information (or share your own experience) regarding PTO banks - the pros and cons? Also, the pros and cons of allowing employees to get cash at the end of the year for a specified amount of PTO left in their bank? Thank you!
Comments
This is my own experience: You need to determine what you want to accomplish with a PTO bank before you will know the pros and cons of that bank.
When I wrote my policies, I determined that it was important that employees take a break for both mental and physical health, but I wanted that break to be a planned break that wouldn't adversly impact the company. At the same time, I recognized that there are going to be unplanned times that an employee needs to be off (I just wanted that kept to a minimum). Thirdly, I took a look at what my state law requires in regards to vacation.
Based upon what I wanted to accomplish, I determined that I would separate vacation from PTO and the two should not mix except in defined circumstances. We offer vacation, but cap the amount that can be accrued. Since employees don't want to lose any potential accrual it "forces" them to take planned time off. Vacation must be approved a minimum of 1 week in advance with the exception of FMLA, bereavement of a close family member, or inclement weather as defined in our policy. Otherwise, you cannot use your vacation time even if you are out of PTO.
PTO is there for when an employee needs unplanned time off. But because I want to encourage planned time off instead of unplanned time off, the employee will never lose their PTO. Instead, the company buys back any time over 40 hours on the employee's anniversary. (This keeps a limit on how much the company is obligated for at any one time.) We pay out everything at the time the employee leaves our company.
I mentioned that it is important to look at your state law regarding vacation because some states that do not allow a "use it or lose it" policy will look to see if your vacation is included in your PTO and therefore your PTO cannot be "use it or lose it".
Finally, I will go back to my original statement: "You need to determine what you want to accomplish with a PTO bank before you will know the pros and cons of that bank." The above works because I am not worried about how to make "holidays" fair and I don't need to incorporate holiday pay into my PTO. If I worked in an industry where the business was open 24/7 instead of just Monday thru Friday, the above would not meet all of my goals and I would need to adjust how it works.
***************************************************************
The above is based on my experience. For additional information from a respected group, you might check out this article: http://www.ahipubs.com/hp/2007/press-release-pto-survey-1107.html
I agree with LadyAnn that the two most important things to look at are state law and the end goals of the timeoff system.
We do "use it or lose it' except in very very rare circumstances. Mostly because we don't want the financial liability on the books past the end of the year. We do not pay out any unused time -- whether it be PTO or vacation. Mostly because we have an office full of workaholics who would never take a stress break if they could get the $s instead and at different times it does get stressful for every employee who works here. Including those at the lower end of the pay spectrum who would be more likely to opt for the $.
To counteract the above, which can be viewed negatively by employees, we do allow the employee to use the full amount without having earned it all. For us, that makes up for the not allowing carryover. Employees can plan vacations better knowing that they could take one earlier in the year. They don't have to wait 'til midyear to have a week accrued. We do not require that the employees pay us back if they leave the company prior to earning the amount they had previously taken. Our environment tends to be one where employees do not tend to leave on their own....but are asked to leave.
So that is what works for our environment. That same analysis would be what I would suggest for you too.