Should Your Company Go with PTO?

03/07/07

It’s the Friday morning before a three-day weekend, and several employees call in “sick,” even though they were perfectly healthy the day before. It’s an example of unscheduled employee absenteeism, and it costs U.S. workplaces an average of $660 per employee, per year.*

But last-minute excuses like this could be a thing of the past with the rising popularity of paid-time off (PTO) programs. They eliminate the need for employees to get time off approved under a certain category of absence (i.e., sick day or vacation day), instead providing employees with a block of time to use however they wish. Whether they simply need a day off, want to finish up some work around the house, or are truly ill, it all comes out of the same "bank."

Companies with PTO programs report positive results that include:

• Employees having more privacy. There is no need to reveal details of an absence, which could possibly create legal obligations for employers



• Employers having a better ability to plan in advance and avoid scheduling gaps as well as the cost of hiring temporary workers



• Morale and productivity improve as other employees feel less burdened by last-minute absences



• Maintaining only one type of time-off plan means less tracking and administrative hassles for managers and supervisors

Before you implement PTO, check your state employment law regulations. Every state has its own laws regarding how employees must be compensated for vacation or sick time.

*2005 CCH Unscheduled Absence Survey