Help with PTO arguments
ACU Frank
2,188 Posts
Several employees have asked my CEO to consider going to a PTO "combined leave bank" instead of separate vacation, sick, and personal days.
From those who are using it or have used it... What are some of the advantages that system provides?
From those who are using it or have used it... What are some of the advantages that system provides?
Comments
We allow so much unscheduled time off in a 3 month period. It doesn't matter what the excuse is, so that also saves us debate and makes it easier for the employees to know where they stand.
It is easier for us to administer too. We have fewer banks to keep track of, and we never have to decide if it should go under personal leave or something else.
There is no way to avoid abuse of paid leave completely, but we have had much less abuse this way. Most employees prefer to save time for a planned vacation rather than just calling in because they don't feel like working that day.
Good luck!
Nae
I really like it because not only do I not have to account for two plans, I do not have to make a determination if the employee is ill or not.
They may use their PTO as they feel fit, but to cut down on unscheduled absences we gave them an incentive. If the employee does not use all his/her PTO by their anniversary date it is not carried over , however, they may put a portion of it into their 401K plan. This is great and the employees love it. They get the amount into their 401K with no federal or state taxes taken out since it is written into our 125 401k plan as a profit share.
If you would like our policy let me know.
Shirley
We have the same policy for all employees regardless if they are hourly or salaried.
We do pay out unused PTO when an employee terminates, however, in 2007 we have a use it or lose it policy nothing is carried over. You use it, put it in your 401k up to the max, or you lose it.
If Vacation and Sick Pay is combined into personal than we are required to pay out the PTO remaining in the bank when an employee leaves employment.
We save enough on administrative costs due to administering the plan and on taxes on the amounts put into the 401K that it does not cost any more to pay the people leaving. Besides that we seldom ever have people leaving. 80 percent of our employees have 5 years or longer tenure with the company.
Shirley
Could you also send me your policy by email? I'm particularly interested in how you put the remaining in their 401K plan. That sounds pretty cool!
Thanks,
Deb
Could you forward me a copy of the PTO policy? I'm very interested, as well.
Thank you
[email]kzulauf@lccap.org[/email]
That is awesome that 80% of your employees have been with your company 5+ years! What is your secret?
I find your PTO policy very interesting! We have employees with some very large balances, so I would love to learn more about your plan to see if it is something we could consider here.
If you wouldn't mind sharing, please send it to me at [email]lisa.wolf@iwireless.com[/email]!
Thanks!
Lisa
We retain employees because we do the following:
#1. Treat all individuals with respect
#2. Pay a decent wage
#3. Keep our benefits at a higher level than others in the area
#4. Promote health and wellness at our company
#5. Listen to what our employees say
#6. Screen our new applicants very well
We have 54 employees, 26 have been here 10 years or longer. 45 have been her 5 years or longer, 12 have been here 15 years or longer and 4 have been here for 20 years or longer.
It is a great place to work and the owners appreciate, reward and promote loyal and dedicated employees.
Shirley
E-mail: [email]pat@bnmag.com[/email]
Have a great day!
You've apparently come up with a great idea that many of us are interested in. Rather than answering each request individually, can you summarize for all of us the procedures you use to have the employees put their unused PTO into the 401K plan? Do they put it into their 401K voluntarily or at risk of losing it? Are there any legal issues with forcing them to put it in?
Thanks. Great idea.
I have had no complaints and all receive the amount of time specified in the policy so they have the amount they can use.
Our employees love it, I have had no complaints. My TPA Pinnacle Pension wrote it into our plan and we have our annual 401K audit so I am positive we have done everything correctly.
I did try to post the policy here, but it does not format well in this space. I have it in a word folder and bookmarked it for easy reference.
I don't mind if someone wishes a copy they can email me direct. [email]smcallister@aimintl.com[/email]
You would have to talk to your 401K TPA Administrator about writing in the clause, It is in our master plan document.
Shirley
Much appreciated as always...
The only draw back I know of is that you need to get with the conroller on this. It will "take a hit" on the books the first year when you have to accrue the time off, but once that is done, it is the same for future years as you are probably doing now.
You will need to check your state laws as to whether you pay out at termiantion. I know we did in GA even though we didn't have to. However, we did set up limits.
I don't know why someone would do for exempt and not non-exempt or vica versa. Good luck and would love to discuss with you if you have questions. I am trying to email my old version (which might need a few updates) to people listed in this posting.
[email]ewarthen@newcombspring.com[/email] let me know if anyone else wants a copy.
E Wart
I sent the policy which I have in my handbook for my employees to several people requesting it. From reading the requests it sounds like you would be more interested in the more detailed summary description plan from our TPA. If this is the case than let me know and I will scan it into the computer and get it out to you.
[email]smcallister@aimintl.com[/email]
Shirley
With IT help I have a PDF of my Summary Plan Description which is more detailed than the policy from the handbook.
I sent it out to many of you, but if you were missed or only received the policy and with the more detailed document please let me know.
I wil be here another hour and a half and I am off to the mountains...ATV TIME!
[email]smcallister@aimintl.com[/email]
Shirley
Do you have a policy tied in with it on how ee's request time off? It sounds like most of you don't. If that's the case, have you had issues with business interruption and how did you deal with it?
Do you use the method where ee's accrue days over a period of time or do they get it in one lump?
Thanks in advance.
The PTO is accrued on the employee's anniversary date with the company.
Shirley
For Employees working 30 or more hours per week
1-4 years 10 days (80 hours) If unused at anniversary year end 40 hours can go in 401K
5-9 years 23 days (184 hours) if unused at anniversary year end 80 hours can go to 401K
10-19 years 28 days (224 hours) If unused at anniversary year end 120 hrs can go to 401K
20+ years 30 days (140 hours ) If unused at anniversary year end 160 hours can go to 401K
Employees working 21-29 hours will receive PTO at 50% of the earned amount listed above.
Highly compensated employees earning 100,000 or more are not eligible for the PTO/401K conversion benefit.
Shirley
>unless it is an emergency. It also says it is at the approval of your
>immediate suprvisor.
>
>The PTO is accrued on the employee's anniversary date with the company.
>
>Shirley
Do you require some form of documentation to "prove" it was an emergency?
Shirley
PTO is helpful when there are a variety of shifts, some longer than others, and when staff work holidays. It is also all purpose and can be used as sick time, vacation, personal business, holidays (anything except company business and jury duty). Someone on a 10- or 12-hour shift must take that number of hours, and someone on an 8-hour shift must take 8 hours, which makes the two somewhat fair. If a worker must work a holiday, there is no PTO deductin for the day and the worker gets the benefit of taking the day later as desired or gets to save the time for vacation or sick time.
We allow workers options on unused time, accrued on an anniversary year basis, and the options include cashing some in for $$, carrying over a limited amount of time, or rolling time into a different bank that becomes something similar to STD (but is not an insurance plan). FMLA-qualifying circumstances are the only way the hours can be used from the other bank, and they can never be traded back to PTO, sold, or cashed in any way in our organization.
From an accounting perspective, PTO time rolled into the STD-type plan is no longer a liability on the books, and requirements that employees limit hours carried over or cash them in keeps the liability fairly low. Actually, most of our staff never seem to accumulate more than about 3 weeks.
Our policy requires that PTO be approved by supervisors at least 2 weeks in advance, and retroactive requests are not approved unless the absence is FMLA qualifying. In FMLA sitautions employees are required to use PTO to maintain payroll deductions without interruption.
Pros:
PTO is a single leave type to track from an administrative standpoint.
PTO minimize abuse of sick time because of the all-purpose aspect.
Exempt staff (in our organization) have their PTO accounts docked for absences.
PTO empowers employees to manage their time off in a way that is convenient for their individual lifestyles and circumstances.
PTO works well when a variety of shifts are involved and makes things more fair for all staff.
The accrual is a single accrual type for payroll software.
Liability for PTO can be fairly easily forecasted since it is (in our case) based on hours actually worked. A projection of expected work hours & wages in budgeting will yield an expected liability for PTO.
STD insurance policies coordinate with PTO; w/c insurance carriers (at least ours) don't coordinate and don't have a problem with employees receiving PTO and lost wage compensation at the same time.
Cons:
All or part of it can be use it or lose.
Some employees will use it in the smallest of increments as soon as hours are available.
New employees (in our organization) don't have PTO time until they have actually worked some hours. (We do not advance any PTO time).
There are always a handful of folks who just won't be happy with anything and will find fault with a PTO system.
best wishes
Shirley
They have to be off 3 days before they need a doctor's excuse and before they are on FMLA.
We have loyal employees, we trust them and they respect us for trusting them. I have only 21 employees that have been here less than 10 years and only 5 of them have been here less than 5 years. Trust breeds trust and if you respect your employees they will be loyal to the company.
I don't know about anyone else, but it works for us. If it becomes a problem with repeat attendence issues we deal with them on a one on one basis and we find out what the cause is and do what we can to fix it. (counseling, schedule change, LOA) we work with the employees and have very seldom had to actually terminate anyone.
We don't worry about someone getting away with something...if they use their time..well it is theirs to use. If they abuse the system we work with them on it.
Shirley