Work/Life Balance

What’s in Your Time Off Policy?

By Joy E. Ward

Flu season is nearly here. Is your sick pay policy ready? One of the reasons to have a sick leave policy is to allow employees to stay home when they are sick so they can recuperate and not infect the rest of the staff. But what happens when sick days are used up and something unexpected happens, like a child too sick to attend school or an ill parent requiring assistance? 

On the other extreme, maybe you are one of the lucky ones who rarely get sick and have to miss work. Do you feel like you are leaving some benefits “lying on the table?” Since many sick policies are of the “use it or lose it” variety, this may encourage employees to be less than honest in an effort to make use of having compensated time off. 

Paid Time Off

Paid time off is highly valued by employees and addresses the need for work/life flexibility. Time away from the office allows for rest and re-energizing. Personal days help to keep the mind fresh. Can a plan be structured to compensate those who rarely miss work and, at the same time, provide a safety net for employees who must be gone through no fault of their own?

According to research from Commerce Clearing House, some 63 percent of US companies now use some form of flexible paid-leave bank. Employees get a “time bank” instead of separate vacation and sick-leave policies. A paid-time off (PTO) policy allows professionals to control their own time. Employees can take time off for any reason. It can be used when you are healthy as well as when you or your family is not. This rewards those who are rarely sick. Personal time off allows employees to attend parent-teacher conferences, performances and athletic events guilt free.

However, caution is in order when planning for personal time off. If the entire allotment is used as vacation, there will be none available for unexpected events, such as a sick child or a school snow day. It could be a mistake to operate under the false assumption that 20 personal days means there will be 4 weeks of vacation. In addition, be aware that an employer may charge your time-off account for personal appointments such as doctor visits. Employees might want to plan for a few days of PTO per year for doctor and dentist appointments, even if they are in excellent health.

Some Disadvantages

A potential abuse of a PTO policy is sick employees not using sick days. Many employees view all PTO days as vacation and they don’t want to spend any of their “vacation.” So they come to work and spread germs. This can diminish productivity if more employees become ill.

Employers like the “time-bank” because it is easier to track and administer. With a cap on the number of days permitted to roll forward, their liability can be limited. Employers may permit cash out of unused PTO days at a certain percent of their current value. This can encourage strong attendance and reward employees who do not over utilize the plan.

Flexible leave policies offer distinct advantages to both employers and employees. It is easy to see why they are such a popular component of benefit packages.