Creating a Successful PTO Program

HR Resource
September 28, 2012 — 2,751 views  
Become a Bronze Member for monthly eNewsletter, articles, and white papers.

Business leaders who wish to reward their employees for their performance and boost the appeal of benefits packages may wish to add a paid time off (PTO) program. In general, time earned under such programs is used by employees when they wish to take vacation or personal days. Business leaders who wish to attract the top talent in their industries will find that a comprehensive PTO program can be crucial in beating out a competitor when it comes to hiring. 

However, PTO programs are not without their pitfalls. If you wish to put a PTO program in place in your business, you must carefully consider the financial burden it will impose. You should also carefully design your PTO program so that it provides maximum benefits to your employees without compromising business wellbeing. Carefully evaluate the following factors when adding a PTO program to your company's benefits package. 

Rate of Accrual

You will need to decide how PTO time will be accrued by your employees. Some employers simply assign a set number of PTO days to employees every year. You may give employees who have worked with you for three or fewer years five days of PTO time and increase how many days employees receive for every year of tenure that they gain. Note that many businesses do not allow employees to accrue PTO time until they have completed an initially probationary period ranging anywhere from 30 days to six months.

Requests to Use PTO

It is essential that a policy regarding vacation requests and requests to use PTO be put in place and followed closely. You may wish to require that employees make vacation time requests two weeks or one month prior to an intended vacation. Be sure that you follow applicable laws in your state when deciding whether or not to grant such requests. 

PTO Roll Over

You must decide if unused PTO time will be rolled over at the end of the year. In some states, you must either allow employees to roll over their PTO or pay them out for unused PTO days at the end of the year. 

Payout of PTO Benefits 

Be sure that you understand your state's regulations governing what happens to PTO days if an employee is fired or resigns. You may need to pay an employee for unused PTO days when their employment is terminated.

HR Resource