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Paid Time Off Policy (PTO)

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Definition:

See a sample Paid Time Off (PTO) policy.

A paid time off (PTO) policy combines vacation, sick time and personal time into a single bank of days for employees to use to take paid time off from work. A PTO policy creates a pool of days that an employee may use at his or her discretion. When an employee needs to take time off from work, the PTO policy enables a certain amount of the time off to be paid time off.

So, employees who may have lied or made up stories about how they were using their time in the past, have the right to take PTO at their discretion to support work-life balance and flexibility.

To protect the company work load and customer service, you'll want to require that employees request PTO, with two days prior notice, unless the employee is truly sick. Establish other guidelines, as needed, before the adoption of PTO.

Advantages of a Paid Time Off Policy

  • You treat employees as adults who are entitled to use PTO at their discretion without oversight.

  • PTO gives the employer some control over unscheduled absences, a serious problem and cost for many.

  • Employees value the flexibility that PTO provides.

Disadvantages of Paid Time Off Policies

  • Some research shows that employers who adopt PTO may give employees fewer overall days than they had previously, and/or new employees accumulate PTO more slowly than longer term employees.

  • Employees tend to view PTO as a benefit and use all of the time off, whereas they may not have in the past.

  • Employees tend to view all PTO time as vacation and come to work when they are sick.

Paid Time Off Averages

In a study conducted by the WorldatWork Association in May, 2010, the average number of PTO days offered by employers was:

  • Less than one year of service: 15 days

  • 1-2 years of service: 19 days

  • 3-4 years of service: 20 days

  • 5-6 years of service: 23 days

  • 7-8 years of service: 23 days

  • 9-10 years of service: 24 days

  • 11-15 years of service: 26 days

  • 16-19 years of service: 28 days

  • 20+ years of service: 29 days

You'll want to take a look at the whole survey report about paid time off. In addition to the range of paid time off days that employers offer, the rest of the employee benefit, paid time off, is explored.

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