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| Issue: |
You are considering implementing a paid-time-off program at your company. What are the benefits of this type of program? |
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Answer: |
Under a paid time-off (PTO) plan, employees typically accrue, or bank, a certain number of hours or days to use for time off during each month or pay period. While not all paid time-off plans include time for incidental absence/sick days, most (86 percent) do.
One advantage of a PTO program is that by removing the distinction between incidental absence/sick days and vacation, employees have greater flexibility in managing their time off, and supervisors need not wonder whether an absent employee is using a legitimate sick day. With fewer time-off categories, PTO plans also enable easier tracking and administration.
When it serves as the only source for incidental absence/sick days, a key advantage of a PTO plan is a limit on the total number of paid absences for brief illnesses, personal emergencies and vacation, unlike plans in which employees are given a separate pool of sick days, or full salary continuation for several months. To prevent long illnesses from depleting the paid time-off bank, employers generally also provide a separate short-term disability (STD) plan that pays for absences due to illness or injury lasting beyond a week.
Source: Mercer Human Resource Consulting, 1-800-333-3070. |
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