Combined Paid Time Off Benefit
Increasingly, employers are offering or considering a Paid Time Off benefit for employees that goes beyond the traditional vacation benefit. This new approach to paid time off or PTO benefits combines the typical vacation benefit with other paid absences such as paid sick or personal days or even holidays. With this combined paid absence bank, the worker may schedule time off from work without having to specify the reason for absence.
According to business news publisher Commerce Clearing House(CCH), as many as 67 percent of firms responding to the publisher's annual unscheduled absence survey, use paid leave banks as one way to improve control over employee absences.
Respondents to the CCH survey rated paid leave bank policies as an effective measure in controlling employee absenteeism, along with other absence control measures such as disciplinary action, verification of illness, yearly performance reviews, and personal recognition programs.
A similar survey, conducted in 2004 by Mercer Human Resource Consulting, reported that 42 percent of respondent companies offered a paid time off benefit that combined vacation benefits with at least one other category of time off such as personal or sick days or holidays. According to the Mercer Report, the frequency of firms offering PTO benefits was up from 30% of firms reporting use of such benefit in 2000.
Employers report that the PTO benefit plan provides greater flexibility for employees in determining how to use paid absence benefits while helping employers to get a better control of costly unscheduled absences
Survey data reveals that use of PTO plans is most prevalent in the health care industry. Health care organizations with a need for 24 hour a day - 7 day a week staffing requirements find that the PTO benefit plan promotes better scheduling of leave periods and helps to minimize unscheduled absences.
Some of the PTO benefit plans permit the employee to bank or save unused days for future need. Other plans permit the employee to sell unused days and receive a cash payout at year end. Many of the firms still provide a separate benefit for short term or long term disability.
With the implementation of a PTO plan, the employer's record keeping is simplified by tracking only one benefit, rather than maintaining multiple sets of records for multiple paid absence benefits.
One down side of the PTO approach to time off benefits is that an employee with numerous health related absences loses the opportunity for an extended vacation.
Likewise, a possible downside for the employer is the state law requirement that a separating employee is entitled to receive pay for any earned unused vacation; and such requirement is applied to the PTO benefit but not to a separately defined sick leave benefit.
In spite of these downsides, it appears that more firms are considering the various absence control procedure issues and implementing PTO benefits.
About the author: William S. Hubbartt is a human resources and privacy consultant St. Charles, IL. www.Hubbartt.com. He is the author of 8 books on management and privacy issues.
