May 10, 2021

Your PTO Policy Needs a Performance Evaluation of Its Own

by Mike O'Neill

The past year and a half has been such a whirlwind of events. When we look back at the past year and see how much our world has changed, it is necessary to stop and look at how your business might need to adapt to keep up with this rapidly changing world. 

In managing the complexity that exists within this new world, one aspect of your company policies you should examine is your Paid Time Off (PTO) policy. As the way people work changes, you may need to consider adapting your PTO policy to better align with the way your employees are now working. Read on for tips and tricks to consider when revisiting the PTO policy for your company.

Unused Days Off

Many companies have a “use it or lose it policy” when it comes to accrued days off. However, the events of 2020 have left many employees with no option to take an actual vacation. As a result, many may have missed out on PTO days they would have otherwise used if it weren’t for the pandemic.  

Allow Roll-Over

Allowing your employees to “rollover” their PTO days into the next year gives them more flexibility to utilize their time off in a meaningful way. This is also ideal for you as a business leader because it helps prevent employee burnout, leading to unproductive employees. 

Allow Roll-Over With Limitation 

Depending on the needs of your business, you may not be able to allow an unlimited rollover of PTO days. Another option would be to limit the number of days your employees are allowed to roll over. You might also want to consider limiting the length of time in which the rollover days could be used. For example, your policy could state that PTO days may be rolled over into the following year, but they must be used before the end of that year. 

If you are considering allowing rollover PTO days to any extent, the most important thing to consider is that you evaluate the unique needs of your business ahead of time to make sure that such a change is not going to leave you shorthanded. 

Offer Payouts for Unused PTO 

Another option to consider would be to offer a payout for unused days of PTO. A payout is advantageous to your employees because the extra cash can be beneficial, especially during a time when many are struggling financially. It also benefits you as an employer because you pay out your employees without them taking any time off work.

Consider Offering Unlimited PTO 

The idea may seem a little far-fetched to someone who has never operated a company that allows for unlimited paid time off. In reality, however, there are many advantages to offering unlimited paid time off. On a practical side, it reduces the administrative burden of having to keep track of PTO. There is also no need to worry about paying out unused days at the end of the year. 

When it comes to your employees, offering unlimited PTO may be a huge selling point for a prospective employee. Allowing for unlimited PTO communicates to a prospective employee that your company culture values a healthy work-life balance. In addition to this, employees are more motivated to optimize their working hours and not feel guilty about taking time off.

Consider Expanding Your PTO Policy Temporarily 

The COVID-19 pandemic was an event that uprooted the lives of everywhere around us in some way. Therefore, it would certainly be reasonable to consider making a temporary change to your PTO policy in light of the pandemic.

Remember to Communicate All Policy Changes

If you decide to change your PTO policy or any other policy while we’re on the subject, don’t forget to clearly communicate these changes to your employees. Depending on the magnitude of the changes you decide to make, you may want to consider things such as holding a company meeting or town hall gathering and/or ensuring employees know the changes by obtaining a written signature. You may also want to consider reaching out to a professional to ensure your updated policy is compliant.

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