Close this search box.
Table of Contents

Share this post

How to Create a PTO Policy

Every worker deserves some time off to recuperate and balance life responsibilities. Turns out, offering paid time off (PTO) benefits can be good for business too. As an employer, it’s recommended to offer PTO to employees. While not mandatory under the Fair Labor Standards Act (FLSA), most companies offer this benefit to employees on either a set number of days per year or an accrual basis whereby employees earn a certain amount of time, based on hours worked. In either case, employers will need to create a written PTO policy to clearly describe the PTO rules and how much time each employee is eligible for. 

What should a PTO policy include? 

A well-written PTO policy will include specific information about the paid time off benefits, what purpose they have, how they are assigned or earned, how many hours/days are allowed per year, what happens to unused PTO, and what makes employees eligible for paid time off. The policy should be easy to locate and understand by employees. Use language that is clear and comprehensive for the average employee. 

What kinds of time off do I include in a PTO policy? 

Employees take time off for a variety of reasons, from their birthdays and vacation plans to illness, employees may request time away from work. In fact, a Glassdoor survey has shown that paid time off is very valuable to 4 in 5 employees, even more so than getting a raise. Employers have two choices when developing a PTO policy — they can either leave the reason open for its use or ask employees to be specific about its use ad provide documentation. The most common categories for PTO include sick time, personal time, vacation time, and volunteer time.                                                                          

How much PTO is enough? 

The question often comes up with HR about how much paid time should be given to employees. According to the most recent survey by Tsheets (owned by accounting software company Quickbooks) over 1,000 U.S. employees were asked how many paid days off they get from their employers. The result was that the average falls around 12-15 total days per year. The breakdown is generally 3 days for sick time, 5 days for vacation time, 5 days for holidays and remaining days for personal time, bereavement, and volunteerism. 

How do I manage time-off requests? 

Managing PTO requests is made simple by the use of a central time off scheduling calendar. HR can review incoming requests as they are reviewed by managers, then track this information against allowable usage per employee. Payroll can use a coding system for allocation days off to the proper paid time off category. 

The benefits of time off to the organization and employees

Allowing employees to take time off is a benefit that they can use any time of the year, for practically any reason. When employees take regular time off they return to work refreshed and refocused, which means they are more productive. A generous paid time off policy can be an attractive recruitment tool as well. Work cultures that encourage the well-being of employees over profits tend to bring in the best candidates and grow into better companies. 

Enforcing the PTO policy

It may seem strange to add this to the article, but in fact, many employees never get around to using up all their paid time off during the year, for a wide range of reasons. Most indicate that they just didn’t take the time out of their busy schedules to request time off, while others said they love working so much they don’t want to miss anything. A Bankrate survey indicates one in three employees plans to not use all their vacation days this year. Employers can do their part to ensure that all employees are using their available time off by sending reminders and encouraging them to take a day off at least once a month, instead of saving them until the end of the year. 

A PTO policy is a great place to start offering employees more perks that can support recruitment and retention efforts. Look to the experts here at WorkLogic for guidance on everything HR. 

Disclaimer: The information and resources provided herein are not a substitute for experienced legal counsel and does not constitute legal advice or attempt to address the numerous factual issues that inevitably arise in any employment-related dispute. Although this information attempts to cover some major recent developments, it is not all-inclusive, and any recommendations are based upon HR best practices and procedures. We recommend you consult an attorney for legal guidance.

This website uses cookies to improve your experience. By using this website you agree to our Data Protection Policy.

Ready to streamline your business and focus on increasing profits?

Request a FREE, custom diagnostic for your business today!