May 07, 2020
Paid leave is a valued perk for employees. A generous policy can help you attract higher quality employees. Once on the job, using leave improves job satisfaction and engagement; as such, business owners can find a number of benefits in proper paid leave usage.
When employees take periodic vacations, they are more productive. However, American employees don’t take enough vacations, and many of us are burned out by the daily grind as a result. The U.S. Travel Association has conducted numerous studies on vacation trends, including one which found that U.S. workers only use 77% of earned PTO. That equals about 5 vacation days per year.
Paid sick leave is critical for health reasons. When an employee stays home due to a contagious illness, it prevents other team members from catching it. If the sick employee was informed that he or she would lose money if they stayed home, though, they would be more likely to go to work and tough it out.
Do Organizations Have To Provide Paid Leave?
No. However, the Family and Medical Leave Act (FMLA) requires businesses to provide unpaid leave. Moreover, business owners cannot terminate the staff member if the time an employee takes off qualifies under FMLA.
Types of Leave
Employers may choose to separate leave types according to their purpose:
• Sick Time: Time off for health reasons.
• Vacation or Personal Time: The employee may use this time for whatever they choose.
• Holidays: Holidays designated at the federal level. May also be referred to as ‘company holidays.’
• Bereavement Leave: Leave taken after the death of a family member.
• Floating Holiday: This is another name for a random paid day off of the employee’s choosing.
• Jury Duty: Employers are required to permit employees to miss work for jury duty.
Paid Time Off (PTO)
Paid time off has become more popular in the past few years. Many employers have switched to a PTO policy. In this type of policy, leave is not categorized. Employees can do whatever they wish during their time off.
How Does Leave Accrue?
PTO accrues as employees work their regular shifts/schedules.
Some businesses allow workers to take paid leave before earning it. Each employee is given a set number of days or hours at the beginning of the year. If they quit before the year ends, however, they may have to forfeit its value from their final paycheck.
Many organizations nationwide offer an increase in the amount of PTO an employee receives as their tenure at the company lengthens.
What Is The Average Amount Of Leave In The U.S.?
According to the Bureau of Labor Statistics (BLS), the average U.S. worker gets 10 days of vacation leave annually.
Traditional Leave
As explained previously, traditional leave is categorized—sick days, personal days, vacation, etc.
The acronym PTO typically refers to leave that isn’t categorized.
PTO or PTO Banks
Each employee gets the same number of annual paid days off. Employees can use them however they like.
Do you have an issue with absenteeism? Consider this:
54% of organizations that switched to a combined PTO policy saw a 10% decrease in unscheduled absences, according to a survey by the Alexander Hamilton Institute. 4% saw a decrease of 20%.
PTO Purchase Plans
A ‘PTO buy-sell’ plan, or purchase plan, allows workforce to buy and sell vacation days. Note that companies that allow PTO buy-sell have to pay attention to tax provisions. Including them in a cafeteria program can keep you in compliance.
Unlimited PTO
Some companies trust their employees to manage their own schedules. This policy has been a success in many workplaces. Most organizations haven’t seen an increase in absenteeism. Or a decrease in productivity.
If you are struggling to find quality staff members, you might choose to consider unlimited PTO. If you are hesitant, you could do a trial run for one year to see how it works out.
Manage Leave Policies With TimeWorksPlus
TimeWorksPlus expedites leave management. It also makes it easy for staff members to request leave. Plus, it gives supervisors a systematic way to see all requests and approve them.
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It's a controversial topic: How much paid time off should you give your employees? Smart companies give more than the minimum, knowing that some employees value time off even more than a salary raise. Read through for some thoughts on a good vacation policy.
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More News & Press can be found in our Archive.
