Skip to content

Personalize Your Company’s Personal Time Off Policy

5 min read

Americans famously value hard work. Research shows that 11% of Americans work more than 50 hours a week and 33% work weekends and holidays. Proactive businesses know that such a rigorous schedule will inevitably lead to employee burn out. That’s why more companies are exploring innovative personal time off policies.

Well-rested employees make for a stronger workforce. How can your business help employees to achieve the ideal work-life balance without throwing a wrench into the workflow? Here, we’ll explore how to update your time off practices to keep everyone happy.

  1. What is Personal Time Off?
  2. Is Personal Time Off Paid?
  3. The Benefits of PTO
  4. Evolving Your Time Off Policies
  5. Unlimited PTO?
  6. Managing Time Off Requests
  7. Time Tracking Made Simple by Factorial ✅

What is Personal Time Off?

Also known as paid time off (PTO), personal time off definition is when an employee receives normal payment for time away from work. PTO has traditionally been divided into categories such as sick days, vacation days, holidays, and personal days. (Now this is falling out of fashion, but more on that later!)

While many European countries guarantee workers four weeks paid vacation, most Americans will receive between 5-10 days of PTO.

Legal Regulations

America has no federal personal time off laws. Instead, paid time off accrual is regulated by some states. In these instances, workers earn one hour of paid time off for every 40 hours (or full week) they work. This accrual is capped annually. For more information, check out your state and local laws.

Company Policy

Without legal guidelines, it is often up to individual businesses to create personal time off policies to entice employees. Smart HR departments deploy generous PTO plans to attract top talent. After all, paid time off is one of the most valued benefits for employees, second only to healthcare. To meet this demand, many businesses are restructuring how they think about personal time off.

Is Personal Time Off Paid?

By definition, personal time off is usually paid. If an employee has used up their accrued or allotted vacation time, they are still entitled to up to 12 weeks of job-protected unpaid personal time off via the federal Family and Medical Leave Act (FMLA). Other types of prolonged leave such as parental leave or bereavement leave may be covered by state laws.

Most workers, however, won’t exhaust their PTO. According to a study by the Center for Economic & Policy Research, 52% of Americans didn’t use all their PTO in 2017. If a worker should leave a company with unused PTO, the company is usually responsible for paying the equivalent salary of unused sick time.

What Are the Perks of PTO?

The benefits of a PTO policy can be wide-ranging. Managers agree that vacation improves employee health, boosts morale, and alleviates burnout. It can also give employees the internal resources to put in longer hours down the line.

Employees may be afraid of taking time off because they fear it will negatively impact their career. In fact, the opposite has proven true. Vacations give employees the clarity and energy to pursue meaningful career development.

Evolving Your Personal Time Off Policy

A business’s personal time off policy template affects its ability to attract and retain skilled workers. It also directly impacts employee experience, satisfaction and productivity. Get the most out of your PTO policies with the following adjustments:

Floating Holidays Reflect a Diverse Workplace.

Traditionally, personal time off includes public or so-called “bank holidays” such as Christmas, Labor Day, and New Years. Nowadays, employers are rethinking if this system is truly meeting the needs of their diverse workforce.

Some companies are instead of offering floating holidays. This means employees can exchange the time off from holidays they don’t celebrate (ex. Christmas) for holidays they do (ex. Ramadan). Other companies may offer a “floating holiday” in addition to more traditional holidays.

Generous Plans Allow Workers to Recharge.

Growing businesses need to prioritize employee satisfaction and engagement. Offering time off is one of the best ways to help employees feel valued. In the long run, this will reduce employee turnover and the associated costs of training and hiring replacement team members.

PTO Banks Can Simplify the Admin Processes.

A growing number of companies have begun using PTO banks. This system does not distinguish between personal time vs sick time, and instead gives employees a set number of days off for both. For example, if a company previously offered a one-week emergency paid leave and two weeks vacation, with a PTO bank, they would simply offer three weeks off. Employees can take advantage of unused sick pay to take longer vacations.

On the downside, this may lead to employees coming into work when sick instead of recovering at home. It is also illegal in states like New York and California, where employers are required to provide a minimum amount of sick leave. Finally, employers with this policy may not compensate departing employees for unused sick time.

Sabbaticals Eclipse the Competition.

One way to win the hearts of potential employees is to offer a sabbatical leave or volunteer time off (VTO). At outdoor clothing company Patagonia, employees can take two months paid time off to work with an environmental group. Nurturing the employee experience is vital to maintain a productive workforce. Employees come back more inspired than ever, bringing new energy to their work.

New call-to-action

What’s the Deal with Unlimited Paid Time Off?

You’ve probably heard of unlimited pto vacation paid time off. Businesses with these policies do not distinguish between personal time off vs vacation and set no maximum on time off. With their supervisor’s approval, workers can take as much as they want. This may sound like a dream come true, but the policy remains controversial.

Those in favor argue that unlimited PTO gives employees the flexibility and freedom to organize their own schedules and workflow. Those opposed say that employers tacitly discourage employees from using this benefit. They may actually end up taking less time off than their peers with set maximums. HR teams proceeding with unlimited PTO should make sure employees know the company encourages time off!

How Are You Managing Personal Time Off Requests?

Is your HR team bogged down with personal time off request forms? It’s time to do away with the pomp of the personal time off letter.

Instead, train employees on how to request time off for personal reasons through a holiday and absence tracker. Managers can field requests when they are ready. With customizable settings, you can categorize different kinds of PTO (sick days, vacation days, etc) and allow employees to select which applies. Bonus: never again lose or misplace a request on a messy desk.

New call-to-action

Are You Using a Personal Time Off Tracking Spreadsheet?

Keeping track of personal time off with excel templates isn’t only inefficient; it may be putting you at risk for legal liability. At least 37 states have laws regulating PTO accrual and you need to make sure that your employees are compliant. There’s no room for human error!

The right HR software will keep everything ordered, transparent, and legal.

Managing personal time off doesn’t have to be difficult. Spruce up your PTO policies so that employees can take the time off they need, and come back ready to give their best.

Easily Manage Personal Time off Requests

Written by Valerie Slaughter

Related posts

Leave a Comment