How Does Your Business Handle Paid Time Off?

The most important thing that a company can offer its employees is a policy for time off (PTO). In creating a PTO policy, it is important that all of the rules regarding time off are included. Providing clear requirements in a PTO will ensure that there are less problems, questions, and confusing between the employer and the employees.

The first thing that you need in order to establish an effective PTO, is to determine exactly what the eligibility requirements are. You need to decide what the eligibility dates are for employees. This defines exactly when it is that the employees will start to build time off, and when that built time is available for use. If you want to make sure that an employee cannot use accrued time off during a probationary period, it should be specified in the PTO.

The next step is to decide exactly how time off is earned. You need to decide whether it will be by the hour or by receiving set amounts for each full work week that is worked. Choosing an hourly type accrual means that the employees will gain time off based upon the hours that they work in a week. For example, for every 40 hours that they work, they can accrue 10 hours of time off. Choosing a set amount accrual method means that for each week that is completed, an employee will accrue a certain amount of hours. For example, for each week, regardless of overtime amounts, an employee will earn a set rate of 10 hours. This can also work for other types of time off, such as vacation time and sick leave.

By making your specifications clear in the PTO, there is no room for questions or arguments. Employees will know that in order to get their time off they will be required to work past the probationary period. They will also know exactly how their time off accrues.

Also in your PTO, you should have a guideline for the proper way that an employee should request access to their time off. If you require a specific amount of time for notification, specify this. If you require that all time off should be approved by staff members, make sure that these are part of the specifications in the PTO. This will ensure that you don't get requests for time off on your desk the day that the employee wants off. It also ensures that you don't have any confusion about whether an employee has gone MIA, when they actually believe they are on vacation.

Always make sure that anything that you include in the PTO is clear and explained in detail. You want to leave very little room for confusion. This will save you more trouble than what you or your employees need.