PTO Plans

TBHRPRO · October 2001

Our company currently has no sick leave for non-exempt employees, and exempt will receive 6 weeks paid sick leave if a illness falls into FMLA. I would like to see us go towards a PTO plan for all employees, but need some ideas on different policies. We currently have 92 employees down from 180 last year, and with the rising costs of other benefits, I hope to convince the owners that this may help soften the blow for the increasing in premiums for medical insurance. Can anyone let me know what their PTO policy is, and if exempt is different than non-exempt? Sample policies would be much appreciated.

dhnyct · October 2001

We switched to PTO a few years ago. It's much easier to administer since there's no designation between annual, sick, and personal time off. The biggest problem is to be certain employees don't view it as "vacation time".

We earn x hours every pay period, depending on length of service. PTO is charged any time a non-exempt employee does not work his/her scheduled hours. Supervisors sign off on timecards if there is a valid reason why PTO should not be charged.

Currently we only allow a carryover of 24 hours at each individual's anniversary date. By the first of 2002 we plan to introduce a plan to allow a certain number of hours to be transferred to a catastrophic leave bank. Haven't yet decided how to handle those hours at termination. Some of our management staff feels it should be paid out at 100%, but others favor a reduced percentage.

System · October 2001

I am in a similar situation wanting to convert our traditional leave plans to a combined PTO plan. We are also looking at adding an "extended illness bank" to cover hours away from work while waiting for our STD plan to kick in and during it. My question is this, are we required to pay out 100% of any accrued but not used hours in the PTO bank upon termination? I am in the State of Nebraska. Can we say that we will only pay out 50%? I get confused with the "use it or lose it" rules regarding sick and vacation leave time. How would a cash-out option work? I am really trying to justify making this change financially to management. What's my liability? Any adivse would be creatly appreciated. Thanks!

Catherine · October 2001

I confess that I'm not familiar with Nebraska laws; I'm located in Texas. Several years ago my employer (prior to the date I became an employee) switched from a plan with separate vacation and sick leave to a unileave system. Under that, the employees still have any and all time the accumulated under the old plan, and it is accounted for separately from unileave. They are allowed to take that time off if they need to, but should they separate employment, it would be paid to them at 50%. Our current unileave is paid at 100% upon separation, and it is available to carry over on an unrestricted basis.

There is no difference between exempt and non-exempt employees under the plan, but there are three difference levels of "earning" leave, depending on length of employment. It has cut down considerably on sick absences, and all the employees seem pleased with it even though they have less total unileave than they had sick + vacation. We do have a few employees, though, that never take any leave. It will be a substantial chunk of cash to them when the separate employment, but I do think they should perhaps be required to "use or lose" some portion of it during the year because working 10 or 15 years without a vacation doesn't seem like a good thing from a mental health perspsective.

snapier · October 2001

We have a PTO plan. Each employee accrues PTO at a rate of 4.62 hours biweekly. It is prorated from the date of hire. They have an elimination period of 90 days, however after the 90 days they accrual starts from the date of hire. So, basically we ask them not to use the time during those 90 days so that we may get them up to speed and training within the company. They may carryover 40 hours but must use those 40 hours during the first quarter of the following year. We do not pay out any unused PTO. That benefit is there for them to use, relax, time for themselves. We don't reimburse individuals whom do not elect Medical/dental. So the same goes for PTO.

Rockie · October 2001

A lot of this "use it or lose it" or paying out or not paying PTO upon termination is tied up in State law. You really need to research your particular state before you put something into place. California, in particular, has very stringent state employment laws, and your state may have some similar laws.

Our PTO plan is very generous and we also given 7 paid holidays per year. Some companies even combine the holiday time into a PTO bank. I don't advise this as employee's don't look at it as getting holidays if you do this. Ours is based on years of service and we allow carryover of 45 days per year. If you would like the scale, I will be glad to send to you. My EMAIL is [email]HR@scheart.com[/email].

PTO Plans

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