To read Part 1 - Insurance, click here.
When I started my first full time job, the one thing I was looking forward to most was paid time off. The idea that I could spend a workday at home or out of town - and get paid - was a brand new concept to me. However, I didn’t anticipate the many variations of PTO that exist in the workplace, and needed to do a fair amount of research to differentiate between regular paid time off, personal days, sick days, floating holidays, etc. This blog post is meant to clarify the difference between these definitions and explain why some businesses might utilize all of them, and others might lump them together in one large sum.
Paid time off, or PTO, is a broad term that pools most of the forms of time off that exist in the workplace. This includes Vacation Time, Personal Days, Sick Days, Floating Holidays, etc. There is no federal regulation on how much PTO, if any, a business has to provide to their employees, so they will typically allot it themselves. Utilizing this will help businesses with both recruitment and retention. About 90% of all full time employees are granted some form of PTO in the United States, so the few companies that are not yet on that bandwagon will have difficulty bringing in, and keeping, quality employees.
Some businesses will choose to have a PTO bank, which allows their employees to choose how much of their time off they put toward vacation and how much to reserve in anticipation for illness. Many employees see this as the preferable option since it gives them so much freedom, and for those who rarely get sick it often times means they get more vacation time. Additionally this option simplifies leave tracking, since there is no concern as to whether or not the employee is using sick time or vacation time. It also removes the necessity for employees to bring in doctors notes when they are ill, or come up with excuses or even lie if they cannot make it to work for any reason. They do not have to justify why they take a day off, but rather do so as needed for their particular circumstance, and delegate vacation, sick days and personal days as they see fit.
Alternatively, some companies will distribute a certain amount of vacation time and sick time, which are not interchangeable. This might mean that employees get less vacation time, but it will usually ensure they have sick time available when needed. With a PTO bank employees can easily get overzealous with taking time off early in the year, and find themselves stuck at their desk with a debilitating head cold come December. Conversely, if vacation time and sick days are one in the same, employees might prefer to come to work sick rather than stay home, and in turn use those days for a vacation later in the year.
Ultimately, having a PTO bank looks good for potential candidates, and will likely keep your current employees around for a while. However, don’t ignore the sound logic behind the separation between sick days and vacation days.
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